Canadian regulators have rejected the attempted takeover of Progress Energy Resources Corp (TSX: PRQ, OTC: PRQNF) by Malaysia’s state-owned oil and gas company Petroliam Nasional Berhad, bettern known as Petronas. The result was a one-day decline on Monday of nearly 10 percent for Progress shares, which now trade about 11 percent below Petronas’ offer of CAD22.

Other producers’ stocks also lost ground, though most had rebounded by the end of the day. These include Nexen Inc (TSX: NXY, NYSE: NXY), which is currently seeking approval for a takeover by China’s CNOOC Ltd (Hong Kong: 883, NYSE: CEO) for CAD27.50 in cash. Nexen’s share price is now nearly 15 percent below that offer, reflecting heavy skepticism about regulatory approval.

I’ve rated both Nexen and Progress as sells in our How They Rate table for some time. That was largely because they had very little upside trading within a stone’s throw of takeout prices.

Both of these companies are valuable properties at the right price. Petronas and Progress are apparently going to continue pursuing regulatory approval for their deal. CNOOC isn’t giving up on Nexen. And neither apparently is communications giant BCE Inc (TSX: BCE, NYSE: BCE) in its pursuit of Astral Media Inc (TSX: ACM/A, OTC: AAIAF), which was turned back by communications regulators last week.

Nonetheless, these developments demonstrate once again why it’s important to take profits in takeover targets when the stock is pricing in full success. Now with prices lower, these stocks are certainly much more interesting.

But I want to watch the next couple weeks’ developments surrounding these deals before I change my sell advice for Nexen or Progress or raise my buy target for BCE above USD42.

As for other energy producers taken down on the news, my advice is unchanged, other than to affirm that any trading below buy targets are indeed again ripe for purchase.

I’ll have more in the November Canadian Edge, which will be published on Friday, Nov. 9.

Colabor Performs

Thankfully, the news this week from Colabor Group Inc (TSX: GCL, OTC: COLFF)–the first CE Portfolio Holding to report third-quarter profits–was considerably more favorable.

The distributor of food and related products posted a 7.9 percent gain in overall sales, 3.2 percent excluding acquisitions. The latter is a substantial improvement over prior quarterly levels and a clear indication marketing initiatives are working.

Cash flow is the primary measure of profitability for the business, and it rose by 4.4 percent during the quarter to 3.15 percent of sales. Those improved margins are due to consistent cost reduction and efficiency initiatives, which will be augmented in fiscal 2013 by a CAD2.8 million internal restructuring charge taken in the third quarter.

The company’s 12-month payout ratio based on cash flow came down to just 62 percent and was just 52 percent for the quarter.

Distribution segment sales rose 3.6 percent year over year, thanks in part to warmer summer weather in Eastern Canada. Wholesale revenues rose 20 percent, or 2.1 percent excluding acquisitions. The company announced the renewal of two long-term supply agreements totaling CAD40 million in annual sales, demonstrating its ability to compete.

As for the balance sheet, the company is still well within its debt covenants and continues to make progress cutting leverage. The planned sale of the Skor Culinary Concepts Division should aid that cause. And there’s no debt due until the current CAD150 million credit agreement expires; there’s CAD118 million currently drawn on that line.

Management expects further marketing and cost-cutting initiatives to drive profits going forward. There’s still the problem of competition, with US-based Sysco Corp (NYSE: SYY) driving some of it. And food products distribution markets are still being affected by weakness in the Canadian restaurant business.

This sensitivity to the economy’s ups and downs is a major reason why Colabor is an Aggressive Holding rather than a Conservative Holding. But these numbers show that, despite the obstacles, this is still a growing franchise paying a well-covered dividend and backed by an improving balance sheet.

That’s enough reason to keep Colabor a buy up to USD10 for those yet to take a position.

When to Expect Numbers

Here’s when recommended companies are expected to report their numbers. Note that I don’t send Flash Alerts for non-Portfolio companies but will recap their numbers as reported in your regular issue of Canadian Edge.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–Nov. 1 (confirmed)
• Artis REIT (TSX: AX-U, OTC: ARESF)–Nov. 7 (confirmed)
• Atlantic Power Corp (TSX: ATP, NYSE: AT)–Nov. 5 (confirmed)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–Nov. 9 (estimate)
• Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF)–Oct. 30 (confirmed)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, OTC: BRPFF)–Nov. 8 (confirmed)
• Canadian Apartment Properties REIT (TSX: CAR, OTC: CDPYF)–Nov. 8 (confirmed)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–Nov. 8 (confirmed)
• Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)–Nov. 6 (confirmed)
• Dundee REIT (TSX: D-U, OTC: DRETF)–Nov. 5 (confirmed)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–Nov. 5 (confirmed)
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–November 9 (confirmed)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–Nov. 6 (confirmed)
• Just Energy Group Inc (TSX: JE, NYSE: JE)–Nov. 8 (estimate)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–Nov. 1 (estimate)
• Northern Property REIT (TSX: NPR, OTC: NPRUF)–Nov. 7 (confirmed)
• Pembina Pipeline Corp (TSX: PPL, NYSE: PBA)–Nov. 6 (confirmed)
• RioCan REIT (TSX: REI, OTC: RIOCF)–Nov. 6 (confirmed)
• Shaw Communications Inc (TSX: SJR/A. NYSE: SJR)–Oct. 25 (confirmed)
• Student Transportation Inc (TSX: STB, NSDQ: STB)–Nov. 9 (estimate)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–Oct. 24 (confirmed)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN OTC: ACAZF)–Oct. 30 (confirmed)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–Nov. 14 (estimate)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–Nov. 2 (estimate)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–Nov. 9 (estimate)
• Colabor Group Inc (TSX: GCL, OTC: COLFF)–Oct. 23 Flash Alert
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–Nov. 9 (estimate)
• Extendicare Inc (TSX: EXE, OTC: EXETF)–Nov. 7 (confirmed)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–Nov. 1 (estimate)
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–Nov. 8 (estimate)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–Nov. 2 (estimate)
• Pengrowth Energy Corp (TSX: PGF, NYSE: PGH)–Oct. 31 (confirmed)
• PetroBakken Energy Ltd (TSX: PBN, OTC: PBKEF)–Nov. 8 (confirmed)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–Nov. 9 (estimate)
• Poseidon Concepts Corp (TSX: PSN, OTC: POOSF)–Nov. 8 (estimate)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–Nov. 1 (confirmed)
• Wajax Corp (TSX: WJX, OTC: WJXFF)–Nov. 2 (estimate)