SAP with 17 percent opportunity
The SAP stock is currently just below its all-time high. With bonus certificates with a cap, investors can still generate high returns even if the stock corrects significantly after the latest price increase.
The SAP stock reacted at the end of May 2024 to the weak figures of the cloud-based enterprise software competitor Salesforce with a price drop from 184.48 Euro to 166 Euro. Boosted by the renewed strength of US technology stocks, the SAP stock then went on a price surge that raised the stock price to a new high of 190.96 Euro by June 28, 2024.
Experts confirmed their buy recommendations for the SAP stock in anticipation of positive quarterly figures and continuing growth dynamics, with price targets of up to 225 Euro (Goldman Sachs).
The Investment Idea
Anyone considering an investment in the SAP stock due to its promising future prospects even at historically high price levels and wanting to significantly reduce the risk of direct stock purchase can consider an investment in a bonus certificate with a cap. With such a certificate, investors can still generate positive returns even if the stock loses up to a quarter of its current value.
Apart from dividend payments, private investors can only achieve positive returns on stock investments through price increases with direct stock purchases. Bonus certificates with and without cap offer investors an advantage over direct stock purchases not only in the event of a price increase in the stock but also in the event of stagnating or falling prices, potential annual returns in the double-digit percentage range.
The Mechanism
If the SAP stock does not reach the barrier of 140 Euro by the valuation date of the certificate, then the bonus certificate with the bonus level of 220 Euro and cap will be redeemed on December 29, 2025, with the bonus level. The cap defines the maximum redemption amount of the certificate. The barrier, which is active until the valuation date, December 19, 2025, is currently at 140 Euro. Investors could buy the certificate for 188.86 Euro when the SAP stock price was 188.60 Euro.
The Opportunities
Since the certificate can currently be obtained for 188.86 Euro, it offers a gross profit of 16.64% (equivalent to 11.20% per year) in 18 months if the SAP stock price does not fall below 140 Euro or its current level by the valuation date.
The Risks
If the SAP stock touches the barrier of 140 Euro and the stock price is below the cap at the valuation date, the certificate will be redeemed with the stock price at that time. If this price is below 188.86 Euro, the certificate investment will result in a loss.
*This post does not constitute a recommendation to buy or sell SAP stocks or investment products based on SAP stocks. No liability is assumed for the accuracy of the data.
- If you're a consumer considering a financial investment in SAP's stock, you might consider buying a bonus certificate with a cap to mitigate the risk of significant price drops.
- Some financial advisors might suggest investing in SAP's stock, especially with the positive quarterly figures and expectations of continued growth, and they might recommend buying bonus certificates with or without a cap to enhance returns, whether the stock price increases, stagnates, or decreases.
- If you're an investor looking for stock tips, you might want to consider SAP's stock, as experts have given optimistic buy recommendations with price targets up to 225 Euro, and bonus certificates with caps could provide additional opportunities for high returns, even if the stock price corrects.
