In the past few days, SAP shares have risen from their lows for the year. With a bonus certificate with a cap, investors can also generate a high return if the price comes under pressure again.
With a price loss of 30 percent since the beginning of 2022, the SAP share (ISIN: DE0007164600) is one of the worst DAX values for this period. After the share fell to its lowest level in 12 months at EUR 86.70 on June 13, 2022, it was then able to recover to its current level of around EUR 88.
Despite the continued weakness of the share price, experts with price targets of up to EUR 142 reiterated their buy recommendations for the software group, which is currently undergoing a realignment and would like to increasingly offer its customers comprehensive software solutions in the future.
The investment idea
An investment in the SAP share, which is classified as slightly undervalued, could be quite interesting at the reduced price level. In the current weakness of the overall market, however, the risk of further price declines also seems possible for solid stocks such as the SAP share. With bonus certificates with a cap, investors can achieve returns above the high inflation rate over the next few months even if the SAP share falls significantly.
Apart from dividend payments, private investors can only achieve positive returns when buying a share directly if the price rises. Compared to direct share purchases, bonus certificates with and without a cap 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 share never touches or falls below the barrier of EUR 60.96 by the valuation date of the certificate, then the bonus certificate will be repaid on June 23, 2023 with the bonus level of EUR 97.53.
The key data
The HSBC bonus certificate with a cap (ISIN: DE000HG3U3K2) on the SAP share has a bonus level and a cap of EUR 97.53. The cap defines the maximum repayment amount of the certificate. The barrier activated by the valuation date, June 16, 2023, is EUR 60.96. With the SAP share price of EUR 88.53, investors could buy the certificate for EUR 88.05. The certificate currently costs even less than the share.
The chance
Since the certificate is currently priced at EUR 88.05, it enables a gross return of 10.77 percent in twelve months if the share price never falls by 31.14 percent to EUR 60.96 or below by the valuation date.
The Risks
If the SAP share touches the barrier of EUR 60.96 by the valuation date and the share is listed below the cap on the valuation date, investors will receive one share for each certificate in their custody account. If the allocated shares are sold below the purchase price of the certificate, then the certificate investment will cause a loss.
This article does not constitute a recommendation to buy or sell SAP shares or investment products based on SAP shares. No liability is assumed for the correctness of the data.
