An investment in a company in the industrial gases sector, such as Linde, could certainly be interesting. With bonus certificates with a cap, investors can reduce the price risk of buying shares directly and still achieve high returns.
Shares in Linde, one of the world’s leading suppliers of industrial gases, reached an all-time high of EUR 309.35 in the first week of trading in 2022. After that, the share price crumbled down to 245 euros by March 7, 2022, only to then recover to its current level of around 293 euros. After the publication of the better-than-expected figures for the first quarter and the optimistic outlook, the share could also escape the weak trend of the overall market in the coming weeks.
After the solid first quarter, experts with price targets of up to EUR 352 (Deutsche Bank) reiterated their buy recommendations for Linde shares.
The investment idea
Even after the positive share price development in recent months, an investment in a company in the industrial gases sector, which is currently the trend, could be interesting. Investors who want to significantly reduce the price risk of buying shares directly and still want to achieve a return in the double-digit percentage range could consider buying a bonus certificate with a cap as an alternative to buying shares directly.
The certificate presented below will also yield a return of 12 percent if Linde shares are listed well below the lows of March 7, 2022 by May 2023.
The way it works
If the Linde share never touches or falls below the barrier of EUR 225.00 by the valuation date of the certificate, then the bonus certificate with cap will be repaid on May 24, 2023 with the bonus level of EUR 329.80.
The key data
The barrier for the DZ Bank bonus certificate with cap (ISIN: DE000DW2BM95) on Linde shares is EUR 225.00. Bonus level and cap were attached at EUR 329.80. The cap defines the maximum payout amount of the certificate. Valuation date is May 17, 2023, the certificate will be redeemed on May 24, 2023. With the Linde share price of EUR 293.20, investors were able to purchase the certificate for EUR 292.13.
The chance
Since investors can currently buy the certificate for EUR 292.13, it enables a gross return of 12.89 percent in just over twelve months if the share price never falls by 23.26 percent to EUR 225.00 or below by the valuation date.
The Risks
If the Linde share touches the barrier of EUR 225.00 by the valuation day and the share is listed below the cap on that day, the certificate is redeemed at the closing price of the share determined on the valuation day. If this is determined below EUR 292.13, then the certificate investment will cause a loss.
This article does not constitute a recommendation to buy or sell Linde shares or investment products based on Linde shares. No liability is assumed for the correctness of the data.
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