Siemens Energy with 30 percent opportunity
Price fluctuations in the double-digit percentage range within a short period of time are not uncommon for Siemens Energy shares. With bonus certificates with a cap, investors have very high return opportunities and a safety buffer due to the high fluctuation range of the share price.
Due to the problems with the wind turbine subsidiary Gamesa, the Siemens Energy share price fell by 37% in June 2023. Subsequently, the share price, which was still trading at an annual high of EUR 24.80 on May 30, 2023, slowly but surely approached the EUR 10 mark. Following the company's announcement that it had entered into talks with partner banks and the German government to strengthen Siemens Energy's balance sheet, the share price slumped by more than 30% to as low as EUR 6.40 on October 26, 2023. The share then recovered to its current level of EUR 9.50.
Despite the quality problems at the wind power subsidiary, the experts at Goldman Sachs reiterated their buy recommendation for Siemens Energy shares with a price target of EUR 20.50 due to the Group's strong gas and power plant division.
The investment idea
For investors who are considering an investment in the volatile Siemens Energy share at the current price level and at the same time want to significantly reduce the price risk of a direct share investment, bonus certificates with a cap currently offer very attractive yield opportunities and a safety buffer. With such products, investors can generate double-digit percentage returns over the next 13 months with a significantly reduced risk of loss.
Compared to buying shares directly, bonus certificates with a cap offer investors the advantage that they enable high returns even if share prices stagnate or fall. In return for the attractive sideways opportunities, certificate investors have to forego the unlimited profit potential of the share investment and the prospect of dividend payments.
How it works
If the Siemens Energy share never touches or falls below the barrier of €4.75 by the certificate's valuation date, the bonus certificate with cap will be redeemed on December 31, 2024 at the bonus level of €9.25.
The key data
The DZ Bank bonus certificate with cap on Siemens Energy shares (ISIN: DE000DJ6D198) has a bonus level and cap of 9.25 euros. The cap defines the maximum payout amount of the certificate. The barrier activated until the valuation date, December 20, 2024, is EUR 4.75. At the Siemens Energy share price of €9.50, investors could buy the certificate at €7.33. This means that the certificate can be purchased at a discount of 22.84% compared to a direct purchase of shares - fully in line with investors' expectations.
The opportunities
As investors can currently purchase the certificate at EUR 7.33, it enables a gross return of 29.60 percent in 13 months (equal to 23 percent per year) if the share price never falls by 50 percent to EUR 4.75 or below by the valuation date.
The risks
If the Siemens Energy share touches the barrier at EUR 4.75 by the valuation date and the share is quoted below the cap on the valuation date, the certificate will be redeemed at the closing price of the Siemens Energy share determined on the valuation date. If this is fixed below EUR 7.33, the certificate investment will result in a loss.
This article does not constitute a recommendation to buy or sell Siemens Energy shares or investment products on Siemens Energy shares. No liability is assumed for the accuracy of the data.
- An astute advisor might suggest considering bonus certificates with a cap for investors interested in Siemens Energy, as they offer attractive yield opportunities with reduced price risk, especially considering the share's volatility.
- Given Siemens Energy's strategic partnership with prominent companies like Siemens, it's crucial for stock tip givers to emphasize the potential in the Group's strong gas and power plant division, while acknowledging the challenges faced by its wind power subsidiary.
- For those with a financial investment in Siemens Energy, diversifying assets could involve exploring bonus certificates with a cap for reduced market risk and the opportunity for double-digit returns, even if the stock remains stable or experiences slight losses.
Source: www.ntv.de
