Reynolds American Inc (RAI): Today's Featured Tobacco Winner

Reynolds American ( RAI) pushed the Tobacco industry higher today making it today's featured tobacco winner. The industry as a whole closed the day down 1.1%. By the end of trading, Reynolds American rose 62 cents (1.4%) to $46.01 on light volume. Throughout the day, two million shares of Reynolds American exchanged hands as compared to its average daily volume of 2.7 million shares. The stock ranged in a price between $45.35-$46.10 after having opened the day at $45.36 as compared to the previous trading day's close of $45.39.

Reynolds American Inc., through its subsidiaries, manufactures and sells cigarette and other tobacco products in the United States. Reynolds American has a market cap of $25.89 billion and is part of the consumer goods sector. The company has a P/E ratio of 18.8, above the average tobacco industry P/E ratio of 18.1 and above the S&P 500 P/E ratio of 17.7. Shares are up 10.6% year to date as of the close of trading on Thursday. Currently there is one analyst that rates Reynolds American a buy, one analyst rates it a sell, and nine rate it a hold.

TheStreet Ratings rates Reynolds American as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the tobacco industry could consider PowerShares Dynamic Food & Beverage ( PBJ) while those bearish on the tobacco industry could consider PowerShares DB Agriculture Sht ETN ( ADZ).
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