My first among the equal priorities of evaluating second-quarter numbers for all CE Portfolio Holdings this earnings season was to make a decision about Atlantic Power Corp (TSX: ATP, NYSE: AT).

At this point, for most Canadian Edge subscribers the damage has been done. The Feb. 28, 2013, announcement of a 65 percent dividend cut represented a reversal of management’s late 2012 assurances of sustainability.

And it precipitated a steep selloff that’s taken the share price from a close of CAD10.26 the day of the fateful February announcement to new lows as of this writing just above CAD4. In November 2012 Atlantic was changing hands at CAD15 a share.

But in its announcement of fourth-quarter and full-year results management revised sharply downward its guidance for 2013 earnings, citing previously unmentioned challenges in the Ontario power market and worsening conditions in the company’s key Florida market.

CEO Barry Welch noted that as late as November 2012 Atlantic thought it would be able to re-contract its Lake project in the Sunshine State on favorable terms but by December 2012 it had become clear that that wouldn’t happen.

Management also noted that ongoing challenges for the broader wholesale power market clouded the re-contracting of the Selkirk project in New York.

Part of Atlantic’s response to the prevailing trend in the wholesale market has been to shift away from projects exposed to this weakness, which included a since–completed plan to sell its Florida plants.

This announcement caused Atlantic’s share price to dip, raising its cost of capital and effectively pricing it out of the competition for existing projects operating under long-term power purchase agreements.

So its growth focus shifted to earlier-stage projects, with an emphasis on renewable energy, where Atlantic would have to put up capital for a later payoff. Management’s preference had been to finance new projects with 50 percent equity and 50 percent debt.

A lower share price and higher cost of debt capital pushed management to make the decision that it needed to apply more cash to its development investment. And the quickest way to free up cash to do so was to reduce the dividend.

 That was the rationale for February’s 65 percent cut.

Management, with its announcement of results for the second quarter, has now signaled a new order of priorities. No. 1 is to reduce its debt burden, while No. 2 is to optimize performance at its existing power-generation projects and boost cash flow.

No. 3, which flows from Nos. 1 and 2, is to reduce its cost of capital to better position the company to compete for development projects.

In fact, as far as new development projects are concerned, Mr. Welch noted during the second-quarter conference call that Atlantic is “tapping the brakes on the growth side.”

Management has also taken meaningful steps to reduce an outsized general and administrative budget, including consolidating accounting functions formerly spread across three offices into two, by approximately USD8 million.

But getting to fulfillment on No. 3–in other words, investing in new projects that will help the company grow–now seems a distant prospect, not impossible though further out on the timeline than we contemplated back in late February and early March.

Management has hit four of the following five benchmarks we established in March:

• Successful completion of the sale of the Florida plants at the stated price.
• Successful syndication of the Canadian Hills financing.
• At least one new project announcement.
• Successful completion of the Path 15 power line sale.
• Payout ratio in line with guidance.

There has been no new project announcement, nor is there likely to be anytime soon. The question for us is whether to stick around for an upside that today seems well in the future.

We know the downside; we’re living it right now, as Atlantic’s share price is scraping along at all-time lows following the second-quarter earnings announcement of Aug. 8 and conference call on Aug. 9.

Ahead of the earnings announcement, on Aug. 5, management disclosed that it had renegotiated its credit facility to avoid breach of coverage ratios. Notably, the limit under the facility was reduced from USD300 million to USD150 million.

On Friday morning Atlantic characterized terms of the amended facility as “adequate,” noting that the new arrangement provides “sufficient” liquidity and that it won’t be a constraint because management expects to be in a “limited growth” period anyway.

And a higher interest rate will be cash-flow neutral because of the new limitation on borrowing capacity. Management also expressed confidence that it will be able to stay within the new coverage ratios.

As a consequence of the renegotiation of the credit facility Moody’s Investor Service downgraded Atlantic’s corporate rating one grade to B1. The senior unsecured note rating went to B2. The new Moody’s rating is one level above a Standard & Poor’s downgrade in early July.

Moody’s said there is doubt about the “long-term sustainability of [Atlantic’s] business model” resulting from “low power prices and re-contracting risks.”

Second-quarter project income increased by USD23.1 million to USD15.6 million, while first-half project income was up USD91.2 million to USD46.7 million, reversing project losses of USD7.5 million and USD44.5 million, respectively.

Project adjusted EBITDA, which includes earnings from the company’s equity method investments but excludes the results of discontinued operations, increased by USD10.8 million to USD56.2 million and by USD24.9 million to USD136.8 million for the second quarter and first half, respectively.

The increases were due to contributions from new projects added in December 2012, including Canadian Hills and Meadow Creek.

Cash flow from operating activities declined by USD15.7 million, primarily due to asset sales and disposition costs, which were partly offset by Canadian Hills and Meadow Creek, and realized foreign exchange gains.

Distributable cash and the payout ratio were negative, primarily due to lower cash flows from operating activities, higher project capital expenditures and additional project debt repayments.

Cash available for distribution for the first six months was up 3 percent to USD75 million, while the payout ratio for the first half of 2013 was 48 percent, both in line with management’s guidance.

Atlantic finished the second quarter with approximately USD150 million of excess available cash, consistent with its forecast, and is on track to have approximately USD155 million at year-end 2013.

Management also completed the sale of the Atlantic’s 17 percent interest in the Gregory project for net cash proceeds of USD34.6 million on Aug. 7. It also received federal grant proceeds of USD49.5 million for Piedmont and repaid the project’s bridge loan of USD51 million in July.

Atlantic also reaffirmed guidance for 2013 project adjusted EBITDA, cash available for distribution and the 2013 and 2014 payout ratios.

Management noted that it currently has no projects earmarked for sale, with none likely until 2014, with priority for disposal on those in which it has a minority interest and/or those it doesn’t operate.

The focus now is on asset optimization; management is investing in projects to boost generation capacity as a means of achieving some growth.

Otherwise the priority for excess cash is to reduce debt and lower the cost of capital to become more competitive for development projects.

Prospects for dividend growth are dim. Sustainability of the current rate is actually a more relevant question at this point, though Mr. Welch noted during the second-quarter conference call that Atlantic’s current forecast models, built around debt reduction, include the current rate.

Mr. Welch again noted that Atlantic recognizes the importance of the dividend for the investor community.

Atlantic is very likely to meet its 2013 EBITDA and cash flow targets. But it does face some longer-term re-contracting risks going forward. And it will have even more difficulty securing new projects to replace lost cash flows due to the new restrictions on its liquidity.

This was the one factor we identified at the time of the 65 percent dividend cut in February that management didn’t adequately address when it presented first-quarter results in May. And an answer to the question of when the company will be able to reinvest in a way that generates cash flow for shareholders remains elusive.

What Atlantic does have is a solid collection of power-generation assets that could be attractive to a larger entity with a low cost of capital and low administrative expenses. In other words, from where I’m sitting, it looks like the best, most realistic catalyst for share-price upside from here is a takeover offer.

There are many variables–including the very real issue of management’s credibility following its very quick, very dramatic turnabout from late 2012 talk of predictable cash flow and sustainable current dividend rates to early 2013 announcements of dividend cuts and strategic shifts.

Management did then properly characterize this is as a growth-and-income story. But that’s not what we got into Atlantic Power for back in October 2006. And, as late as November 2012, that’s not what we thought we owned.

We don’t have a “special situations” segment in the Portfolio. If we did it would be a perfect place for this stock: a turnaround story with a long-term horizon for which you get compensated at a dividend yield of 9.9 percent at current levels.

If I were kicking the tires on Atlantic I might take a speculative position. But that’s not the position we’re in; we’re already long-term investors who’ve appreciated views from nice peaks but are now in a deep valley.

At this point, again, we know what the downside is.

On the positive side, management is making meaningful progress on debt reduction, having paid down USD172 million in long-term obligations. Cutting administrative costs and optimizing performance at existing projects makes for a leaner, more efficient operation as well.

These are positives that, if nothing else, make the portfolio attractive for a potential bidder, noting that Atlantic is trading at a price-to-book value of just 0.70.

We’re keeping Atlantic Power in the CE Portfolio. Hold it if you have a long-term horizon. If you opt to sell, do so into strength.

Conservative Update

Highlighting AltaGas Ltd’s (TSX: ALA, OTC: ATGFF) second-quarter earnings announcement is a 2 percent increase in its monthly dividend rate to CAD0.1275, effective with the August payment due Sept. 16, 2013, to shareholders of record as of Aug. 26.

AltaGas shares will trade ex-dividend as of Aug. 22.

Including the half-cent increase announced on Apr. 25 the new rate represents a 10.9 percent year-over-year dividend increase, to an annualized rate of CAD1.53 per share from CAD1.38 as of September 2012.

This is a wonderful illustration of an invest-to-grow story in process, as management reported a significant increase in funds from operations driven by an 89 percent increase in operating income that itself resulted in large part from the acquisition of US utilities in August 2012 and the addition of the new Blythe power facility in mid-May 2013.

Earnings were partially offset by lower frac spreads and higher operating costs.

Management also noted higher throughput in the Gas business and higher realized power prices.

Normalized net income was CAD35.5 million, or CAD0.30 per share, for the three months ended June 30, 2013, compared to CAD10.4 million, or CAD0.12 per share, a year ago. Net income was CAD35.9 million, or CAD0.31 per share, up from CAD25.8 million, or CAD0.29 per share, a year ago.

Normalized funds from operations increased to CAD83.1 million, or CAD0.71 per share, from CAD40.7 million, or CAD0.45 per share, for the second quarter of 2012.

The payout ratio for the second quarter based on normalized FFO was 51.4 percent.

AltaGas also announced that its subsidiary Pacific Northern Gas Ltd has entered into Transportation Reservation Agreements with both Douglas Channel Gas Services Ltd and AltaGas Idemitsu Joint Venture LP for 520 million cubic feet per day (Mmcf/d) of natural gas transportation capacity on the proposed Pacific Northern Gas (PNG) pipeline expansion.

The PNG expansion is expected to increase capacity of the PNG system to approximately 750 Mmcf/d from its current capacity of 115 Mmcf/d. PNG continues to work with other potential shippers for the remaining capacity.

This is a key achievement in AltaGas’ long-term goal of exporting liquefied natural gas (LNG) from British Columbia.

AltaGas also announced the expansion of its Cogeneration fleet at Harmattan to 45 megawatts to meet increased power demand at the Harmattan complex and increase sales to the Alberta power market. It will also build out its Cold Lake natural gas transmission system to deliver natural gas to provide steam to two heavy-oil projects near Cold Lake, Alberta.

And management noted “good progress” on its run-of-river projects, which include the Forrest Kerr, McLymont Creek and Volcano Creek generation facilities. The projects remain ahead of schedule and on budget.

Based on the 2 percent dividend increase, AltaGas is now a buy up to USD37.25.

Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF) reported second-quarter cash flow from operations of CAD6.6 million, down from CAD7.4 million a year ago due to a CAD200,000 decrease in royalties from lower market activity and a CAD600,000 increase in administrative expenses driven mainly by  one-time legal, consulting  and special committee fees related to the completion of a revised management services agreement that should result in longer-term savings.

Royalties for the three and six months ended June 30, 2013, were CAD9.7 million and CAD17.8 million, respectively, compared to CAD10 million and CAD18.2 million, respectively, for the same period in 2012. This reflects a slowdown in the Canadian real estate market but certainly not an implosion along the lines of that which took down the US economy in 2007-09.

Cash flow from operations for the rolling 12-month period to June 30 was CAD1.92 per share, down from CAD1.98 for the 12 months ended Dec. 31, 2012.

Net earnings for the three and six months ended June 30, 2012 was $3.4 million and $2.8 million, or $0.36 and $0.30 earnings per Share, respectively, as compared to net income of $7.9 million and $4.7 million or $0.83 and $0.49 per Share, respectively, for the same period in 2012.

Canadian real-estate transactions slipped by 5.9 percent on a rolling 12-month basis to CAD160.8 billion, due to a 1.3 percent increase in the average selling price and a 7.1 percent decrease in home-sale activity.

But for the three months ended June 30 transactional dollar volume was up 1 percent on a 3.1 percent increase in the average selling price and just a 2.1 percent decrease in home-sale activity.

Brookfield Real Estate’s revenue is actually relatively stable, through booms and busts, because it’s based purely on the number of real estate agents in its network.

As of June 30 this network included 15,499 agents operating under 438 franchise agreements providing services from 673 locations, with an approximate 24 percent share of the market based on 2012 transactional dollar volume.

Management noted “a steadily improving economy that will help the market return to historical sales volume and house price appreciation averages.” The impact of still-record-low interest rates has been muted by relatively low consumer confidence.

But improving economic numbers in Canada as well as in the US, coupled with commitments from monetary policymakers on both sides of the border to maintain rates at low levels for the foreseeable future provide a solid foundation for Brookfield Real Estate.

Management expects sales volumes to start to trend upward on a year-over-year basis in late 2013 and for house-price appreciation to return to long-term historical averages in 2014.

Brookfield Real Estate, which declared a dividend of CAD0.092 per share for August 2013, payable on Sept. 30, 2013, to shareholders of record on Aug. 30, remains a buy under USD14.

Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF) expansion into the US continued with solid success during the second quarter, and the financial technology services provider is poised to further this part of its long-term growth strategy with the pending acquisition of Harland Financial Services.

Davis + Henderson reported 8.9 percent growth in revenue from continuing operations, as US sales surged by 58.2 percent year over year to complement 4.8 percent growth in Canada.

Net income of CAD13.6 million, or CAD0.2298 per share, was down 34.8 percent from CAD20.9 million, or CAD0.3526 a year ago primarily due to a loss of CAD8.8 million stemming from the May 10 closing of the divestiture of its non-strategic business processing operations.

Adjusted EBITDA was up 2.2 percent to CAD58.3 million, though profit margin shrank from 31.5 percent to 29.6 percent. Adjusted net income increased by 5.7 percent to CAD34.2 million from CAD32.3 million in 2012, while adjusted net income per share ticked up to CAD0.5774 from CAD0.5461.

Management paid down CAD20.5 million of debt during the quarter.

During the second quarter Davis + Henderson paid a dividend of CAD0.32 per share, 84.6 percent of income from continuing operations per share of CAD0.3781.

The signal move of the quarter was the July 23, 2013, announcement of an agreement to acquire Florida-based Harland Financial Services, a leading provider of strategic financial technology, including lending and compliance, core banking and channel management technology solutions to US banks, credit unions and mortgage companies.

The transaction should be immediately accretive to adjusted net income per share “in the high single-digit range” in 2014, before taking account of potential cost savings.

HFS will add 5,400 US bank and credit union customers to Davis + Henderson, for a combined count of more than 6,200, as well as its own set of financial technology products. The company posted adjusted revenue and adjusted EBITDA of approximately USD306 million and USD104 million, respectively, for the 12 months ended March 31, 2013.

HFS is considered one of the top four providers of core banking technology in the US.

On a pro forma basis the combined enterprise generated approximately 36 percent of its 2012 revenue in the US, compared to 8 percent for Davis + Henderson on its own. The deal should also push Davis + Henderson past the CAD1 billion revenue mark, with a high degree of pro forma revenue under long-term contract.

Davis + Henderson, making moves that ensure sustainability and augur further growth in its dividend rate, is a solid buy under USD22.

Keyera Corp (TSX: KEY, OTC: KEYUF) is passing along the fruits of its outstanding second-quarter results to shareholders in the form of an 11.1 percent increase to its monthly dividend rate. It’s Keyera’s eleventh dividend increase since its initial public offering in 2003.

Keyera will pay CAD0.20 per share on Sept. 16, up from CAD0.18 payable on Aug. 15.

Management reported a 33.3 percent rise in distributable cash flow to CAD79.3 million, or CAD1.01 per share, from CAD59.5 million, or CAD0.78 per share, in the second quarter of 2012.

The payout ratio for the second quarter of 2013 was 53.5 percent, down from 65.4 percent a year ago.

Net earnings were CAD48.2 million, or CAD0.62 per share, up from CAD25.9 million, or CAD0.34 per share, a year ago. EBITDA of CAD99.4 million was up 20.2 percent.

Gathering and Processing posted an operating margin of CAD38.9 million, down from CAD41.2 million a year ago, though net throughput at Keyera’s gas plants grew again, increasing 9 percent to 1.1 billion cubic feet per day compared to the second quarter of 2012.

NGL Infrastructure margin improved to CAD29.1 million from CAD27.8 million, and processing throughput was up significantly.

Marketing, meanwhile, registered a CAD35 million improvement in operating margin, to CAD46.8 million, as sales volumes were up 10.4 percent.

Following quarter’s end Keyera announced a joint venture with Kinder Morgan Energy Partners LP (NYSE: KMP) to build the Alberta Crude Terminal, a crude oil rail loading facility in Edmonton, Alberta, that will be capable of loading approximately 40,000 barrels per day.

It will be built on newly acquired land next to Keyera’s Alberta Diluent Terminal.

Keyera will also invest CAD40 million to modify its sulfur receipt and forming facilities at the Strachan gas plant in conjunction with a long-term agreement with Suncor Energy Inc (TSX: SU, NYSE: SU).

In April Keyera announced a plan to build a new pipeline from the Wapiti area of Alberta to the Simonette gas plant and to modify the plant to add more processing capacity. Producer interest has inspired the company to build a segregated condensate pipeline as part of this project.

Another solid invest-to-grow story that’s paying off for shareholders, Keyera invested a total of CAD69.1 million in the second quarter, CAD23.1 million for acquisitions. Thus far in 2013 the company has spent CAD99.1 million on growth, CAD27 million for acquisitions.

Keyera now has more than CAD800 million committed to growth capital projects that will begin generating cash flow over the next two or three years, with plans to spend between CAD400 and CAD450 million on these projects in 2013.

In light of its double-digit dividend increase, Keyera is now a buy under USD50.

RioCan REIT (TSX: REI, OTC: RIOCF), beaten down since hitting an all-time closing high of CAD29.51 on Apr. 30, 2013, on the TSX due to fears that US Federal Reserve “tapering” its monthly bond-buying program will drive interest rates higher, posted solid financial and operating results for the second quarter.

Now trading near levels last seen in August 2011, RioCan is now off 18 percent from that all-time high and yields 5.8 percent.

Management’s key portfolio moves during the quarter, including non-core divestments and the acquisition of 1.1 million square feet at an aggregate price of CAD460 million, boosted its concentration in Canada’s six major markets to 72.1 percent as of June 30, 2013, from 67.5 percent as of Dec. 31, 2012. With virtually all of its development projects concentrated in Toronto and Calgary this percentage will continue to increase.

Funds from operations (FFO) were up 14 percent to CAD121 million, 8 percent on a per-unit basis to CAD0.40. The payout ratio for the period was 88.1 percent.

Overall occupancy was 96.7 percent at the end of the quarter, down from 97.4 percent a year ago. The decline in occupancy was largely due to five Zellers stores totaling 466,000 square feet that were returned to RioCan on April 1, 2013.

During the first half of the year Zellers vacated a total of nine locations. This space is already 62 percent leased, with 102 percent of the former rental income in place to come back on stream over the next year.

RioCan renewed 956,000 square feet in its Canadian portfolio during the second quarter at an average rent increase of CAD2.14 per square foot, representing an increase of 12 percent compared to 13.4 percent for the same period in 2012.

Management expects “continued improvement” in cash flow into 2014 due to the completion of projects under development as well organic growth through higher rents.

RioCan, a great value at these levels, is a buy under USD27.

TransForce Inc’s (TSX: TFI, OTC: TFIFF) top line suffered due to the slowdown in North American drilling activity, but management’s long-term growth strategy continues to play out successfully. And the trucking and logistics firm continued to capitalize on its relative strength in a consolidating industry by snapping up yet another solid asset in Texas.

TransForce reported a 2.4 percent decline in total revenue to CAD792.3 million, mainly due to lower revenue in services to the energy sector and in the Truckload segment, partially offset by the contribution from Velocity Express, the Texas-based courier company acquired on Feb. 1, 2013.

Second-quarter earnings before interest and taxation (EBIT) were CAD62.3 million, or 7.9 percent of total revenue, versus CAD68.6 million, or 8.5 percent of total revenue a year ago. Excluding the loss recorded at Velocity due to acquisition expenses, EBIT margin was 8.4 percent.

Adjusted net income, which excludes the after-tax effect of changes in the fair value of derivatives and net foreign exchange gain or loss, was CAD37.4 million versus CAD37.8 million last year.

Adjusted earnings per share EPS increased to CAD0.39 from CAD0.38 a year ago, helped by the repurchase of 4.1 million shares over the trailing 12 months.

Free cash flow was CAD91.1 million, or CAD0.98 per share, up from CAD58 million, or CAD0.61 per share, last year. Free cash flow includes proceeds from the sale of property and equipment of CAD22.5 million, as management made good on a commitment to maximize return on assets.

Funds were primarily used to reimburse long-term debt (CAD37.2 million) and repurchase common shares (CAD14.7 million) during the period.

Looking at segment results, profit improvements in Package and Courier and LTL (less-than-truckload) activities were overshadowed by continued weakness in rig-moving activities of the energy sector.

Margins from existing Package and Courier operations improved, with efficiency gains more than offset the loss at Velocity. In the LTL segment, measures to rationalize the asset base were “successful” and “reduced costs resulted in a higher year-over-year EBIT before gains on the disposal of property and equipment.”

Truckload was hurt by a weak economy, though management has “vigilantly allocated resources to reflect demand variations.” The severe drop in North America drilling activity affected their energy sector services, though here too TransForce has taken “proactive measures to better align supply” to new demand levels.

Management noted that progress on the integration of Velocity with Package and Courier’s existing US operations is being made. The market is growing, “But,” said CEO Alain Bédard “softness persists in the energy sector, and we do not see any short-term significant improvement.”

TransForce expects industry conditions to remain difficult in Canada across all business segments for the remainder of 2013. Key drivers for revenue and EBIT growth will continue to be efficiency improvement, asset rationalization and a disciplined acquisition strategy.

Along with second-quarter results TransForce announced the acquisition of Texas-based EL Farmer & Co, an asset-light dedicated provider of pipe storage and hauling services for the oilfield industry. Management expects the transaction to add annual revenue of CAD70 million following completion in the third quarter.

TransForce continues to leverage its conservative financial policies and solid operating results into opportunistic growth during a time of stress for less-well-situated, smaller companies.

Management hasn’t boosted the dividend since April 2012, for the July 2012 payment. The share price has been on a solid uptrend since then, as the broader market has recognized management’s execution of a growth plan amid otherwise weak economic conditions as well as TransForce’s integration of acquired assets into already efficient continuing operations.

I’m going to boost my buy target based on this solid track record of building a business. TransForce is a buy on dips to USD19.

Aggressive Update

Acadian Timber Corp (TSX: ADN OTC: ACAZF) enjoyed the continued strengthening of softwood sawlog markets, the implementation of new pricing in its fiber supply agreement in New Brunswick and positive markets for hardwood pulp in the second quarter.

Acadian posted a 9 percent increase in net sales to CAD15.6 million on sales volume of 331,000 cubic meters. Results for the period were boosted by sales carried over from the first quarter of 2013 under a short-term vendor-managed inventory program.

Adjusted EBITDA of CAD2.9 million was up from CAD2.2 million a year ago, as adjusted EBITDA margin increased to 19 percent from 15 percent.

Acadian experienced typical seasonal operating conditions in the second quarter. Harvest volume, excluding biomass, for the period was 175,000 cubic meters, unchanged from the second quarter of 2012.

The weighted average log price during the second quarter increased 6 percent year over year, primarily due to higher prices for and a greater volume of softwood sawlogs.

Prices for hardwood sawlogs, which represented 10 percent of net sales, decreased 3 percent as a result of product mix. Selling prices for hardwood and softwood pulpwood were flat year over year.

Although hardwood pulpwood markets continue to be positive, softwood pulpwood markets began to slow, as supply has outstripped demand and inventory levels have increased at regional pulp mills. Biomass markets were stable, with realized gross margin flat.

Management noted in its statement announcing results that the company is broadening its acquisition strategy to include interests in timberlands outside of Eastern Canada and the Northeastern US.

This shift will include participation, with institutional investors, in partnerships, consortia and other investment opportunities sponsored by its 44.9 percent owner Brookfield Asset Management Inc (TSX: BAM, NYSE: BAM). Acadian’s focus will be on investments in which Brookfield establishes enough control to essentially run the operation. Acadian management will have the opportunity to decide on participation on a case-by-case basis.

Brookfield has set up a standby equity commitment worth USD50 million for two years that will facilitate Acadian’s participation in potential investments.

The structure of arrangement allows Acadian to call on the equity commitment in exchange for the issuance of a number of common shares that corresponds to the amount of the equity commitment called divided by the volume-weighted average of the trading price for Acadian’s common shares on the Toronto Stock Exchange for a period of up to 20 trading days immediately preceding the date of the call as approved by the Toronto Stock Exchange.

Management’s outlook for the remainder of 2013 and into 2014 remains positive, based largely on an improving US housing market, though momentum on this front on pricing for its products has slowed somewhat.

Acadian’s share price has come well off its 2013 high, though management continues to build a solid business. The new arrangement with Brookfield should help Acadian build wealth for shareholders too.

Acadian Timber, yielding 6.2 percent at these levels, is a buy under USD13.

Newalta Corp’s (TSX: NAL, OTC: NWLTF) recent growth initiative paid off in the form of solid contributions to second-quarter earnings. And management expects the trend to strengthen during the second half of the year, with adjusted EBITDA forecast to be “at least 20 percent higher than last year.”

Second-quarter revenue grew 15 percent to CAD196.1 million, as adjusted EBITDA increased 27 percent to CAD38.4 million.

Investment in Newalta’s New Markets and Oilfield segments, augmented by the positive impact of higher commodity prices, drove results.

Revenue from New Markets in the quarter rose 45 percent to CAD56.1 million, with gross profit rising 38 percent to CAD19.3 million on returns from investment in two on-site contracts to process mature fine tailings (MFT).

Oilfield revenue was CAD39.5 million, flat on a year-over-year basis. Gross profit, however, surged by 32 percent, though slower drilling activity limited upside. Industrial revenue was up 7 percent to CAD100.5 million, though gross profit slipped by CAD2.1 million to CAD12.3 million.

Newalta’s capital investment plan for 2013 is on budget, and the company’s solid balance sheet and operational track record make a solid foundation for continuing growth into 2014. Newalta is a buy under USD17.50.

Noranda Income Fund (TSX: NIF-U, OTC: NNDIF) reported a 22.9 percent increase in earnings before income tax to CAD14.5 million on stronger premiums and zinc metal sales, higher processing fees and positive currency impacts.

Zinc metal production was 68,286 metric ton, up from 65,521 a year ago, while zinc sales climbed to 75,081 metric tons from 69,664. Zinc premiums averaged USD0.084 per pound, up from USD0.074 a year ago. Sulfuric acid netback remained strong at USD72 per metric ton, up from USD71 a year ago.

Management also took a big bite out of net debt during the quarter, taking it down to CAD62.3 million as of June 30, 2013, from CAD95.5 million as of Dec. 31, 2012.

Cash from operations was CAD17.3 million, up from CAD13.8 million a year ago. Cash distributions totaled CAD4.7 million, based on a monthly distribution of CAD0.04167 per unit. The payout ratio for the period was 27.2 percent.

Noranda Income Fund, currently yielding 9.7 percent, is a buy under USD6.

Parkland Fuel Corp (TSX: PKI, OTC: PKIUF), Canada’s largest independent supplier and reseller of fuels and petroleum products, is another Portfolio Holding that benefitted from growth initiatives underpinned by its relative strength in a time of weakness for potential competitors.

Parkland’s second-quarter adjusted EBITDA was up 7 percent to CAD58.2 million, due to positive results from Elbow River Marketing, acquired from the former AvenEx Energy Corp in February 2013, and management’s supply initiatives.

Offsetting these positives were softer contributions from Parkland’s Commercial and Retail divisions, with less business activity in the oil and gas sector and a return to seasonally historic retail margins.

Distributable cash flow grew by 9.6 percent to CAD42.3 million and exceeded dividends in the second quarter by CAD24.1 million, compared with a cushion of CAD21.7 million in the second quarter of 2012. The dividend payout ratio for the period was 43 percent, down from 44 percent a year ago.

Parkland Fuel Corp is a solid buy under USD18.

The Rest of the Portfolio

Here are reporting dates for the rest of the CE Portfolio. We’ll have full coverage in the September 2013 Canadian Edge, which will be published on Friday, Sept. 6. If there is any immediate action required based on numbers reported by a Holding we will issue a Flash Alert.

Please note that second-quarter results for ARC Resources Ltd (TSX: ARX, OTC: AETUF), Lightstream Resources Ltd (TSX: LTS, OTC: LSTMF) and Vermilion Energy Inc (TSX: VET, NYSE: VET) are discussed in this month’s In Focus feature.

Conservative Holdings

• Artis REIT (TSX: AX-U, OTC: ARESF)–Aug. 8 (confirmed)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–Aug. 8 (estimate)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, NYSE: BEP)–Aug. 9 (confirmed)
• Canadian Apartment Properties REIT (TSX: CAR, OTC: CDPYF)–Aug. 8 (confirmed)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–Aug. 8 (confirmed)
• Dundee REIT (TSX: D-U, OTC: DRETF)–Aug. 8 (confirmed)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–Aug. 13 (confirmed)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–Aug. 8 (confirmed)
• Northern Property REIT (TSX: NPR, OTC: NPRUF)–Aug. 13 (confirmed)
• Pembina Pipeline Corp (TSX: PPL, NYSE: PBA)–Aug. 9 (confirmed)
• Student Transportation Inc (TSX: STB, NSDQ: STB)–Sept. 25 (estimate, FY 2013 Q4)

Aggressive Holdings

• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–Aug. 14 (confirmed)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–Aug. 8 (confirmed)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–Aug. 9 (confirmed)
• Enerplus Corp (TSX: ERF, NYSE: ERF)–Aug. 9 (confirmed)
• Extendicare Inc (TSX: EXE, OTC: EXETF)–Aug. 8 (confirmed)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–Aug. 8 (estimate)
• Wajax Corp (TSX: WJX, OTC: WJXFF)–Aug. 9 (estimate)