Taking a Fresh Look at Reynolds American Inc. (RAI)

Reynolds American Inc. (RAI) is an interesting player in the Consumer Goods space, with a focus on Cigarettes. The stock has been active on the tape, currently trading at $65.40, down from yesterday’s close by -2.23%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

Money managers are always interested in a company that can find the right recipe of fundamental data because it reflects something important going on underneath the surface. Reynolds American Inc. (RAI) currently trades with a market capitalization of $92.48 Billion. That value represents a market adjusting for revenues that have been growing by 1.10 % on a quarterly year/year basis as of the company’s last quarterly report.

The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For RAI, the company currently has $3.15 Billion of cash on the books, which is offset by $501 Million current liabilities. You can get a sense of how sustainable that is by a levered free cash flow of $1.81 Billion over the past twelve months. Generally speaking, earnings are expected to grow in coming quarters. Analysts are forecasting earnings of $0.64 on a per share basis this quarter. Perhaps, that suggests something about why 46.41% of the outstanding share supply is held by institutional investors.

Technical Analysis

No analysis is ever complete without a thorough survey of a stock’s technical behavior. Looking at the stock’s movement on the chart, Reynolds American Inc. recorded a 52-week high of $67.81. It is now trading 2.41% off that level. The stock is trading $65.86 its 50-day moving average by 0.45999999999999%. The stock carved out a 52-week low down at $43.38.

In recent action, Reynolds American Inc. (RAI) has made a move of -0.38% over the past month, which has come on weak relative transaction volume. Over the trailing year, the stock is outperforming the S&P 500 by 11.08, and it’s gotten there by action that has been less volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 2.34% with $377.19 Million sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of RAI.

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