Engineer your own earnings

<p>INVESTORS WHO HAVE followed in the investment footsteps of retail and investment legend Christo Wiese have reaped handsome rewards over the years. Wiese's track record - from Pepkor to Shoprite and many things in between - is littered with an impressive history of profitability. It therefore makes perfect sense to closely watch Wiese's share dealings. His recent trading activity in engineering goods company Invicta - a company of which he's chairman and major shareholder - suggests Wiese has something up his sleeve. (However, it seems he slipped a bit on Shoprite, where he locked himself in a zero cost collar in which he limited himself to a ceiling of R87/share on 2m of his 82m shares until February 2013). (Finweek, 29 April.) </p>
<p>Since early December 2009 Wiese has bought about R4m in shares and single stock futures in Invicta at around the 2 450c/share mark. A few other directors have either been buying or hedging their investments for a maximum 3 713c/share for settlement in 2012. </p>
<p>Invicta is currently in a closed period and due to report its financial performance to the year ended March. Its R139,6m profit for the interim period to September was 9% down on the previous comparable period - that at a time when most other capital equipment distribution companies have needed massive capital injections and loans due to poor market conditions. Almost a third of the 165c/share Invicta earned was paid out in dividends, a feat that should be repeated with ease in a substantially improved market. </p>
<p>Invicta imports and distributes earth-moving and agricultural machinery, bearings and power transmission components. Expectations are definitely high for its full year result and going forward. At its current price of 2 889c Invicta is trading at a rather muted price:earnings multiple of 6,96 times and a generous dividend yield of 4,64% and recommended a buy. </p>
<p><img src='http://www.fin24.com/downloads/Media/article_images/fweng_img/2007/sep/ee_inv060510.gif'> </p>