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

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Reynolds American ( RAI) pushed the Tobacco industry lower today making it today's featured Tobacco laggard. The industry as a whole closed the day down 0.4%. By the end of trading, Reynolds American fell $0.55 (-1.1%) to $50.81 on heavy volume. Throughout the day, 2,882,538 shares of Reynolds American exchanged hands as compared to its average daily volume of 1,498,000 shares. The stock ranged in price between $50.60-$51.24 after having opened the day at $51.22 as compared to the previous trading day's close of $51.36.

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 $27.7 billion and is part of the consumer goods sector. The company has a P/E ratio of 17.9, above the S&P 500 P/E ratio of 17.7. Shares are up 24.0% year to date as of the close of trading on Monday. Currently there are 2 analysts that rate Reynolds American a buy, 1 analyst rates it a sell, and 7 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 revenue growth, notable return on equity, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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