BMW offering a 16% potential for gain
BMW's stock has declined in recent times despite positive expert evaluations. Bonus certificates with a cap enable investors to get substantial returns even if the price drop continues.
BMW's stock has remained stable since it hit an annual high of EUR 115.35 on April 10, 2024. Recently, the quarterly results that fell below predictions pulled down the stock price, making it trade below EUR 100 on May 8, 2024.
Although the group's profitability and car business margins didn't meet market expectations, Bernstein Research reaffirmed their recommendation to buy BMW stocks after the release of the numbers, putting a target price of EUR 132.
Investment strategy
Given the recent fall in the stock price and the generally favorable opinions from analysts, now could be an excellent time for risk-tolerant investors to buy BMW stocks, which are considered significantly undervalued. Those looking to minimize the obvious risk of direct stock investment can consider purchasing bonus certificates on BMW stocks. These certificates enable high returns even if the stock price declines sharply.
Apart from dividend payments, direct purchase of BMW stocks only produce positive returns when the stock price rises. With bonus certificates with and without caps, investors can earn double-digit annual percentage returns not just when the stock price increases, but also when it stays constant or drops.
How it works
If the BMW stock never reaches or falls below the barrier of EUR 70 by the certificate's valuation date, the bonus certificate with cap worth EUR 125 will be redeemed on June 27, 2025, at its maximum redemption value.
Vital data
The Societe Generale bonus certificates with a cap (ISIN: DE000SU51JL6) on BMW stocks have a fixed rate and cap at EUR 125. The cap limits the maximum payout amount a certificate can make. The barrier, which will be in effect until the valuation date, June 20, 2025, is set at EUR 70. At the BMW stock price of EUR 101.40, you can buy the certificate for EUR 108.
Prospects
Since you can buy the certificate at EUR 108 now, it promises a gross yield of 15.74% (or 14% annually) to June 2025 if the stock price stays above EUR 70 or above by the valuation date.
Risks
If the BMW stock reaches the barrier at EUR 70 by the valuation date and the stock is under the cap at that time, you'll receive one BMW share for each certificate. If you sell the acquired share below EUR 108, the purchase price of the certificate, you'll experience a capital loss.
This article doesn't mean to provide any recommendation to buy or sell BMW stocks or products related to BMW stocks. No liability is taken for the accuracy of the information provided.
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- Many consumers may be interested in the potential 16% gain offered by BMW's stocks, making it an intriguing financial investment opportunity for them.
- As an investor, considering purchasing bonus certificates on BMW stocks could be a smart move, as they offer high returns not only when the stock price increases but also during periods of stability or decline.
- Financial advisors may suggest exploring investments in Dax companies like BMW, given their potential for significant gains and the generally favorable opinions from analysts.
- Securities like the Societe Generale bonus certificates on BMW stocks, which promise double-digit returns and have a cap to limit losses, can be an attractive addition to a well-diversified investment portfolio.
Source: www.ntv.de
