Saturday March 27th 2021
28 percent protection
Adidas with a twelve percent chance
After the announcement by the sporting goods manufacturer Adidas on March 10, 2021, that it would again increase sales and profits after the slump in the previous year (especially the strong figures of the last quarter of 2020 give cause for hope) and the resumption of dividend payments of three euros per share, the share rose to its 12-month high of 306.80 euros by March 11, 2021.
However, the joy of the stock exchange traders about the positive news from Adidas was initially short-lived. Since the high for the year, the Adidas share has come under increasing pressure. On March 25, 2021, the share was already trading below EUR 270. Investors with a medium-term investment horizon could view the current weakness of the Adidas share as a buying opportunity.
The investment idea
Anyone who would like to generate disproportionately high returns in the next nine months even if the share cannot rise could consider investing in bonus certificates with a cap.
Bonus certificates with a cap not only enable high potential returns when the Adidas share price rises, but also when the price drops sideways or significantly. As a counter-deal for the attractive sideways opportunities, certificate investors have to forego the unlimited profit potential of the equity investment and the dividend payments.
How it works
If the Adidas share never touches or falls below the barrier of EUR 190 by the valuation date of the certificate, the bonus certificate with cap will be repaid on December 24, 2021 with the bonus amount of EUR 320.
The key data
The HVB bonus certificate with a cap (ISIN: DE000HR40D68) on the Adidas share has a bonus level and cap of 320 euros. The cap defines the maximum payout amount for the certificate. The barrier activated up to the valuation date, December 17, 2021, is EUR 190. At the Adidas share price of EUR 264, investors could purchase the certificate for EUR 286.88.
Since investors can currently buy the certificate for EUR 286.88, it enables a gross return of 11.54 percent (= 16 percent per year) in just under nine months if the share price has never increased by 28.03 percent to EUR 190 or falls under it.
If the price of the Adidas share touches the barrier at 190 euros on the valuation day and the share is listed below the cap on the valuation day, investors will receive one Adidas share for each bonus certificate. If the allocated shares are sold below the purchase price of the certificate, i.e. below EUR 286.88, the investment will end in the red.
This article does not constitute a recommendation to buy or sell Adidas shares or investment products based on Adidas shares. No liability is assumed for the correctness of the data.