Market Comment
It’s an all too familiar theme at present. The market shoots up 1-2% one day, only to retrace the gain the following day. The simple fact of the matter is that the market is undecided between the double-dippers and those that see an, albeit gradual, recovery. Market indecision manifests itself in increased volatility and that is what we are seeing now.

Fedex – Buy
In late July Fedex increased its earnings outlook for the year to May 31 2011, from $4.40 - 5.00 to $4.60 - $5.20 per share. The range is still quite wide and so management has a pretty big target to hit. Even so, over-zealous outlooks are not something that we are seeing at all in the post-GFC world. If anything companies are tending to adopt a cautious if not understandable “under-promise, over deliver” approach.

Randgold – Sell Half
Randgold reported a 52% increase in profit for 1Q10 over the previous quarter and an increase of 92% on a year ago. Profit for 1H10 was up 88% on a year ago. Investors were unimpressed and the stock continued its downtrend. The recent strength in the gold price does provide cause for optimism though as the yellow metal approaches new highs.

Target – Hold
A rising trend in same store sales is boosting Target’s confidence that earnings will continue to move in unison. Target’s second quarter earnings of $679 million were up 14.3% on total sales growth of 3.1% as more people came through the doors during the period.

Ultra Petroleum – Hold
Ultra in name and in performance as the group hit record output in the first half the year. Given that gas prices also rose this fed through to a strong financial performance. Further strong output increases are set for 2011 and 2012 which bodes well for the future and we therefore rate Ultra Petroleum a hold.