The Continental share has a good chance of stabilizing at the current level after the price slide of the past few months. With bonus certificates, investors can achieve disproportionately high returns even if the share moves sideways or falls.
The share of the automotive supplier Continental has fallen significantly since its 12-month high of EUR 118.65 on June 7, 2021 due to known problems such as the lack of chips and delivery bottlenecks. On October 6, 2021, the share even fell below the 90 euros mark for a short time.
However, the share, which is considered to be slightly undervalued, then started a strong price recovery to its current level of EUR 95.50. Because of the spin-off from the Vitesco drive division, which was assessed as positive, the UBS analysts rated the Continental share as worth buying with a price target of 136 euros.
The investment idea
Investors who want to use the continually reduced price level of the Continental share to invest in the share must, of course, accept the risk of a further slide in the share price. With bonus certificates, investors can significantly reduce the risk of buying shares directly and still achieve high returns.
Apart from dividend payments, the direct purchase of Continental shares will only ensure positive returns if the share price rises. With bonus certificates with and without a cap, investors can achieve annual returns of at least ten percent not only when the share price rises, but also when prices stagnate or fall.
How it works
If the Continental share never touches or falls below the barrier of EUR 70 by the valuation date of the certificate, the bonus certificate with cap will be repaid on September 23, 2022 with the maximum repayment amount of EUR 110.
The key data
The HVB Bonus Certificate with Cap (ISIN: DE000HR9X3C7) on the Continental share has a bonus level and cap of 110 euros. The cap defines the maximum payout amount for the certificate. The barrier activated up to the valuation date, September 16, 2022, is EUR 70. At the Continental share price of EUR 95.50, investors could purchase the certificate for EUR 97.03.
Since the certificate is currently available at 97.03 euros, it enables a gross return of 13.37 percent in a little less than a year if the share price never falls by 26.70 percent to 70 euros or below by the valuation date.
If the price of the Continental share touches the barrier of 70 euros on the valuation day and the share is listed below the cap on the valuation day, investors will receive one Continental share for each certificate. If this share is sold below EUR 97.03, the purchase price of the certificate, the investment will cause a capital loss.
This article does not constitute a recommendation to buy or sell Continental shares or investment products based on Continental shares. No liability is assumed for the correctness of the data.