The merger of AvenEx Energy Corp, Pace Oil & Gas Ltd and Charger Energy Corp to form Spyglass Resources Corp (TSX: SGL, OTC: PACED) is now complete.

Spyglass has replaced AvenEx and Pace in How They rate under Oil & Gas.

Trading in Poseidon Concepts Corp (TSX: PSN, OTC: POOSF) remains halted. There are a number of shareholder suits ongoing against the company. One US law firm participating is Howard G. Smith of Bensalem, Pennsylvania (888-638-4847).

Given how fast this one imploded, no one should get their hopes up for much restitution. But by the same token shareholders have little to lose, either. Sell Poseidon Concepts at the first possible opportunity.

The acquisition of Primaris Retail REIT by H&R REIT (TSX: HR-U, OTC: HRUFF) was completed on April 4. Unitholders should have received by now some combination of 1.166 units of H&R and CAD28 per unit in cash depending on their election at the time of the merger. Primaris has been removed from How They Rate coverage.

Advice Changes

Colabor Group Inc (TSX: GCL, OTC: COLFF)–To Hold from Buy @ USD8. The food distributor posted underwhelming first-quarter financial and operating results, and progrees on management’s turnaround plan was negligible.

Most notably, comparable sales declined by 1.8 percent, and the payout ratio surged to 68 percent from 52 percent for the fourth quarter of 2012.

Encana Corp (TSX: ECA, NYSE: ECA)–To Buy @ 20 from Hold. The share price of Canada’s biggest natural gas producer has lagged surging commodity prices this year. This is for aggressive speculators only.

Extendicare Inc (TSX: EXE, OTC: EXETF)–To Hold from Buy @ USD8. Management of the senior care facilities operator announced a 42.8 percent dividend cut and also provided downbeat guidance for first-quarter numbers, as pressures in the US continue to mount.

Norbord Inc (TSX: NBD, OTC: NBRXF)–To Buy @ 30 from Hold. Improving conditions in the US housing market drove solid sales and earnings improvement during the first quarter, and management declared the company’s first dividend in four years. But this remains an aggressive bet.

Potash Corp of Saskatchewan (TSX: POT, NYSE: POT)–To Buy @ 42 from Hold. Management, after boosting the quarterly dividend 33 percent in January, reported solid operating results for the first quarter.

Ratings Changes

Extendicare Inc (TSX: EXE, OTC: EXETF)–To 2 from 3. The company loses a point for the dividend cut, and guidance for first-quarter numbers that will be released May 9 represents a significant negative turn from the fourth quarter of 2012.

Norbord Inc (TSX: NBD, OTC: NBRXF)–To 1 from 0. The oriented strand board manufacturer announced its first dividend in four years, as a recovering US housing market drove solid first-quarter results.

Safety Ratings

The core of my selection process is the six-point CE Safety Rating System, which awards one point for each of the following. A rating of “6” is the safest:

• Payout Ratio–A ratio below our proprietary industry baseline.
• Earnings Visibility–Earnings are predictable enough to forecast a payout ratio below our proprietary industry baseline.
• Debt-to-Assets Ratio–A ratio below our proprietary industry baseline.
• Short-Term Debt Ratio–Debt due in next two years is less than 10 percent of market capitalization.
• Business Stability–Companies that can sustain revenues during recessions are favored over more cyclical ones.
• Dividend History–No dividend cuts over the preceding five years.