Back to the Sauna

From a nice 3 degree centigrade, I came thumping down to earth with 28 degrees in Singapore. As I took a cab home from the airport this morning, I already broke out the first pearls of sweat from my forehead as the air conditioning of the cab was like an old drone that had seen its better days.

The brain functions best in colder temperatures. The head can lose up to half the body's heat. To warm up the brain, blood flows to the organ, making us energetic in cold climates. In humid tropics, brain flows away from the brain in an effort to keep the head cool. We feel sluggish as a result.

Singapore is a fantastic place, don't get me wrong. But the climate is such a let down and today's technology has not yet resolved this problem. I also have a bone to pick regarding its lack of MRT stations around the island but I'll reserve this for another entry.

Upon reaching home, I received a pleasant surprise as CWT, one of the stock that I've heald since June, suddenly broke up from S$1 to 1.15 in high volume. This is a classic breakout.

Here are the signs that convinced me to hold on to CWT:
1. Since the start of 2011, CWT's share price has been supported by strong interest, averaging around 3.6m shares daily since this week's Monday.

2. In fact, since Nov 2010, CWT has gained steadily by 12.5% from 0.915 to 1.03.

3. Strong interest in CWT could be attributed to its recent acquisition of a South African freight forwarder Quarius Shipping International. The earnings accretive acquisition is expected to contribute from 2011 onwards.

4. CWT is also actively pursuing commodities logistics expansion in Europe, Turkey and in particular Indonesia, where the group is building up its coal logistics business.

5. CWT's new strategic direction in commodities logistics offers a much higher yield as compared to their conventional warehousing and freight forwarding businesses.

6. On top of that, last year I saw strong share price support for CWT following its announcement of a sale and leaseback transaction. The market was upbeat on the prospects of a special dividend payout, and CWT reached a 2 year high of 1.15.

7. Investors should take note of another possible sale and leaseback transaction this year.

8. CWT currently has 2 warehouses under construction. We could see another sale and leaseback exercise within the year, which could lead to another bout of special dividend payments this year.

9. Lastly, management has also been purchasing CWT shares in the open market since Dec. Conventional wisdom reflects management's confidence in CWT's outlook