I’m making two changes to the Canadian Edge Portfolios this month. First, I’m selling Yellow Media Inc (TSX: YLO, OTC: YLWPF) from the Aggressive Holdings and replacing it with Student Transportation Inc (TSX: STB, OTC: STUXF). Second, I’m raising Colabor Group Inc (TSX: GCL, OTC: COLFF) back from hold to buy, with an entry target of below USD10.

Starting with Colabor, I had downgraded the stock to a hold following what were troubling first-quarter results. At that time, management projected a sharp improvement in second-quarter numbers and affirmed the safety of the dividend. As it turned out, that’s exactly what we saw in second-quarter earnings. With second-half results likely to be even better thanks to increased revenue from mergers and cost cutting, the stock is a worthy buy again. Colabor Group is a buy under USD10.

In contrast, Yellow Media laid an egg with its second-quarter numbers, posting an alarming drop in revenue and cash flows and slashing its dividend for the third time in three years, by 77 percent. Much worse, however, was the fact that for the first time the numbers backed up the contentions of the company’s critics, rather than management. That removed the only premise under which I was still holding the stock.

Yellow’s move set off another drop in the stock that’s likely to be at least partly reversed in the coming days. And exiting now does mean locking in a large percentage loss. But again, this is only one stock–we didn’t double down on it as it dropped–and there’s no longer a reason to expect a real recovery, hence to hold it. Sell Yellow Media.

In Yellow’s place, I’m putting High Yield of the Month Student Transportation. This company is in prime position to profit from state and local governments’ need to cut costs in an era of high unemployment, weak housing prices and still-to-come federal budget cuts. That’s because these entities still operate two-thirds of school bus fleets in the US–and they can cut costs by either selling them outright to Student Transportation or hiring the company under contract to run them.

The company has targeted long-term annual revenue growth of 11 percent, a figure it’s routinely beat even while paying a yield of more than 9.4 percent. As an added bonus, it’s applied for a listing on the Nasdaq, a move that both affirms the safety of its dividend and will provide access to capital that will spark growth, just as it has for CE Portfolio Holding Atlantic Power Corp (TSX: ATP, NYSE: AT). When the listing is granted, the US over-the-counter (OTC) traded shares will automatically list on the Nasdaq, just as Atlantic’s did when it hit the New York Stock Exchange (NYSE). Buy Student Transportation up to USD7.