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

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Reynolds American ( RAI) pushed the Consumer Goods sector higher today making it today's featured consumer goods winner. The sector as a whole closed the day down 0.2%. By the end of trading, Reynolds American rose 47 cents (1.1%) to $44.23 on average volume. Throughout the day, 1.6 million shares of Reynolds American exchanged hands as compared to its average daily volume of 2.1 million shares. The stock ranged in a price between $43.66-$44.35 after having opened the day at $43.81 as compared to the previous trading day's close of $43.76. Other companies within the Consumer Goods sector that increased today were: True Religion Apparel ( TRLG), up 22.1%, Castle Brands Incorporated ( ROX), up 9.1%, Alliance One International ( AOI), up 8.2%, and Seneca Foods Corp. Class A ( SENEA), up 6.1%.
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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 $24.52 billion and is part of the tobacco industry. The company has a P/E ratio of 17.5, below the S&P 500 P/E ratio of 17.7. Shares are up 5.9% year to date as of the close of trading on Wednesday. Currently there is one analyst that rates Reynolds American a buy, one analyst rates it a sell, and eight 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 increase in stock price during the past year, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

On the negative front, iRobot Corporation ( IRBT), down 13.4%, Schweitzer-Mauduit International ( SWM), down 9.8%, Bunge ( BG), down 9.2%, and Central European Distribution ( CEDC), down 8.9%, were all laggards within the consumer goods sector with Monster Beverage ( MNST) being today's consumer goods sector laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the consumer goods sector could consider iShares Dow Jones US Cons Goods ( IYK) while those bearish on the consumer goods sector could consider ProShares Ultra Sht Consumer Goods ( SZK).

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