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 up 0.2%. By the end of trading, Reynolds American rose $0.59 (1.3%) to $46.02 on light volume. Throughout the day, 1,735,379 shares of Reynolds American exchanged hands as compared to its average daily volume of 2,450,300 shares. The stock ranged in a price between $45.49-$46.19 after having opened the day at $45.54 as compared to the previous trading day's close of $45.43. Other companies within the Consumer Goods sector that increased today were: Buckeye Technologies ( BKI), up 26.5%, Federal-Mogul ( FDML), up 15.6%, iRobot Corporation ( IRBT), up 13.7% and Crumbs Bake Shop ( CRMB), up 8.8%.
  • EXCLUSIVE OFFER: Jim Cramer's Protege, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Reynolds American Inc., through its subsidiaries, manufactures and sells cigarette and other tobacco products in the United States. The company operates through RJR Tobacco, American Snuff, and Santa Fe segments. Reynolds American has a market cap of $25.2 billion and is part of the tobacco industry. The company has a P/E ratio of 20.5, above the S&P 500 P/E ratio of 17.7. Shares are up 9.7% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Reynolds American as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the negative front, China Shengda Packaging Group ( CPGI), down 11.3%, Chromcraft Revington ( CRC), down 9.0%, Central European Distribution ( CEDC), down 7.1% and Coca-Cola Femsa S.A.B. de C.V ( KOF), down 6.8% , were all laggards within the consumer goods sector with PepsiCo ( PEP) 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).

Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.

null

More from Markets

Dow Sinks for Eighth Straight Session; Intel's CEO Departs -- ICYMI

Dow Sinks for Eighth Straight Session; Intel's CEO Departs -- ICYMI

Dow Logs Eighth Straight Drop as Stocks Slump

Dow Logs Eighth Straight Drop as Stocks Slump

This Is What's Hot Thursday - Stocks Slide, Intel's CEO Woes & Major Movers

This Is What's Hot Thursday - Stocks Slide, Intel's CEO Woes & Major Movers

U.S. Banks Pass Fed 'Stress Test' With Room for Dividends, Buybacks

U.S. Banks Pass Fed 'Stress Test' With Room for Dividends, Buybacks

U.S. Drillers at Mercy of Iran, Saudi Production Spat as OPEC Meeting Begins

U.S. Drillers at Mercy of Iran, Saudi Production Spat as OPEC Meeting Begins