32 percent protection
ThyssenKrupp with a 32 percent chance
6/3/2023 7:51 am
An investment in stocks that are prone to fluctuations, such as ThyssenKrupp stock, is naturally associated with risks. With bonus certificates with a cap, investors can achieve disproportionately high returns even if the share price loses almost a third of its value.
The shares of the steel and industrial group ThyssenKrupp came under massive pressure almost exactly a year ago due to high energy costs and falling steel prices and lost more than half of their value by September 2022. After the share recovered strongly from its 12-month low of EUR 4.17 on September 30, 2022, it has been trading within a range of EUR 6 to EUR 7.70 since the beginning of January 2023.
Most recently, the expected IPO of the hydrogen division Nucera gave the ThyssenKrupp share price a boost. In the latest analyses, the majority of experts with price targets of up to EUR 16 (Barclays Capital) reiterated their buy or hold recommendations for ThyssenKrupp stock.
The investment idea
The price level, which is still low compared to the previous year, could be viewed by risk-averse investors as an opportunity to invest in ThyssenKrupp stock. If you want to significantly reduce the undoubtedly existing price risk of buying shares directly and still want to achieve a very high return, you could consider purchasing a bonus certificate with a cap as an alternative to buying shares.
Apart from dividend payments, the direct purchase of ThyssenKrupp stock will only enable a positive return if the stock price rises. With bonus certificates with and without a cap, investors can achieve disproportionately high returns not only when the share price rises, but also when prices are stagnating or falling.
The way it works
If ThyssenKrupp stock never touches or falls below the barrier of EUR 4.50 by the certificate’s valuation date, the bonus certificate with cap will be repaid on June 28, 2024 with the maximum repayment amount of EUR 9.00.
The key data
The HVB bonus certificate with a cap on ThyssenKrupp shares (ISIN: DE000HC6MY48) has a bonus level and cap at 9.00 euros. The cap defines the maximum payout amount of the certificate. The barrier activated by the valuation date, June 21, 2024, is EUR 4.50. At the ThyssenKrupp share price of EUR 6.60, investors could purchase the certificate for EUR 6.81.
Since the certificate can currently be bought at 6.81 euros, it enables a gross return of 32.16 percent (=30 percent per year) until June 2024 if the share price never falls by 31.82 percent to 4.50 by the valuation date euros or below.
If the ThyssenKrupp share price touches the barrier of EUR 4.50 by the valuation date and the share is trading below the cap on the valuation date, investors will receive one ThyssenKrupp share for each certificate in their custody account. If this share is sold below EUR 6.81, the purchase price of the certificate, then the investment will cause a capital loss.
This article does not constitute a recommendation to buy or sell ThyssenKrupp shares or investment products based on ThyssenKrupp shares. No liability is assumed for the correctness of the data.