31 percent protection
SAP with a probability of eleven percent
In the past few days, SAP shares have risen from their lows for the year. With a capped bonus certificate, investors can also generate a high return if the price comes under pressure again.
With a 30 percent price loss since the start of 2022, SAP stock (ISIN: DE0007164600) is one of the worst DAX values for this period. After the share fell to its 12-month low of EUR 86.70 on 13 June 2022, it was able to recover to its current level of around EUR 88.
Despite continued weakness in the share price, experts with price targets up to EUR 142 reiterated their purchase recommendations for the software group, which is currently in the process of realigning and would like to offer its customers more and more comprehensive software solutions in future.
The investment idea
An investment in SAP stock, classified as slightly undervalued, could be quite attractive at the reduced price level. In the current weakness of the overall market, however, the risk of further price falls seems possible even for strong stocks such as SAP. With caped bonus certificates, investors can achieve returns above the high inflation rate in the coming months even if SAP stock falls significantly.
Aside from paying dividends, private investors can achieve positive returns by buying a stock directly only if the price rises. Compared to direct share purchases, cap and capless bonus certificates offer investors opportunities for annual returns in the double-digit percentage range not only when the share price rises, but also when the price stagnates or falls.
The way it works
If the SAP stock never reaches or falls below the barrier of 60.96 EUR by the certificate valuation date, the bonus certificate will be redeemed on 23 June 2023 with a bonus level of 97.53 EUR.
The key data
The HSBC bonus certificate with cap (ISIN: DE000HG3U3K2) on the SAP stock has a bonus level and a cap of 97.53 EUR. The cap defines the maximum refund amount of the certificate. The barrier activated by the valuation date, June 16, 2023, is Euro 60.96. With the SAP share price of EUR 88.53, investors could purchase the certificate for EUR 88.05. The certificate currently costs even less than the fee.
As the certificate is currently priced at EUR 88.05, it allows for a gross return of 10.77% over twelve months if the share price never falls by 31.14% to EUR 60.96 or less by the date of assessment.
If the SAP stock reaches the barrier of EUR 60.96 by the valuation date and the stock is listed below the cap on the valuation date, investors will receive one share for each certificate in their custody. If the assigned shares are sold below the purchase price of the certificate, investment in the certificate will cause a loss.
This article does not constitute a recommendation to buy or sell SAP shares or SAP share based investment products. No liability is assumed for the accuracy of the data.