The Mercedes-Benz share has recently increased significantly. With bonus certificates with a cap, investors can also generate returns in the double-digit percentage range when the upward movement falters.
Since the Mercedes-Benz share, in the course of its months of sideways movement between 50 euros and 61 euros, has headed for the lower edge of the trading range at 50.65 euros on October 11, 2022, the share price has been in the third quarter after the publication of increased sales figures quarter back up. The falling inflation rate in the USA triggered a price rally on the international stock markets, during which the Mercedes-Benz share rose by six percent based on the closing price on November 10, 2022.
Because of the still attractive yields and the positive prospects for the manufacturers of luxury cars, experts with price targets of up to 100 euros (Deutsche Bank) confirmed their buy recommendations for the Mercedes-Benz share.
The investment idea
Investors who are now considering an investment in the Mercedes-Benz share, which is classified as greatly undervalued, and at the same time want to reduce the price risk of a direct share investment, could consider buying a bonus certificate with a cap as an alternative to a direct share investment. With such products, investors can achieve returns in the double-digit percentage range over the next 13 months with a significantly reduced risk of loss.
Compared to direct share purchases, bonus certificates with a cap offer investors the advantage that they enable high returns even when share prices are stagnating or falling. As a counter-trade for the attractive sideways opportunities, certificate investors have to forego the unlimited profit potential of equity investments and prospective dividend payments.
The way it works
If the Mercedes-Benz share never touches or falls below the barrier of 40.50 euros by the valuation date of the certificate, then the bonus certificate with cap will be repaid on December 22, 2023 with the bonus level of 75 euros.
The key data
The DZ Bank bonus certificate with a cap on the Mercedes-Benz share (ISIN: DE000DW7D6M4) has a bonus level and cap of EUR 75. The cap defines the maximum payout amount of the certificate. The barrier activated by the valuation date, December 15, 2023, is EUR 40.50. With the Mercedes-Benz share price of EUR 64.31, investors could buy the certificate for EUR 65.26.
The chance
Since investors can currently purchase the certificate for EUR 65.26, it enables a gross return of 14.92 percent (=13.60 percent per year) in 13 months if the share price has never fallen by 37.02 percent to 40 by the valuation date. 50 euros or less.
The Risks
If the Mercedes-Benz share touches the barrier of EUR 40.50 by the valuation date and the share is quoted below the cap on the valuation date, the certificate is redeemed at the closing price of the Mercedes-Benz share determined on the valuation date. If this is fixed below EUR 65.26, then the certificate investment will cause a loss.
This article does not constitute a recommendation to buy or sell Mercedes-Benz shares or investment products based on Mercedes-Benz shares. No liability is assumed for the correctness of the data.
