Zoom Video Communications (US98980L1017) is one of the big beneficiaries of the pandemic – the share price of the internet video conferencing provider has increased more than eightfold since the beginning of the year (US $ 67) to a high of US $ 570 in mid-October, at the current price of 410 US dollars, the plus is still over 500 percent. At the beginning of December, thanks to an increasing number of payment customers, ZOOM reported strong sales growth of almost 370 percent to USD 777 million. The company is also optimistic for the current quarter, but at more than 115 billion US dollars it is already quite expensive, which increases the risk of setbacks. With certificates, risk-conscious investors can take a defensive approach and cope with minor setbacks.
Discount strategy March with a 14 percent buffer
The discount certificate from HVB with ISIN DE000HR39SL1 generates earnings of 40.35 euros or 47.1 percent pa at a price of 289.42 euros and constant exchange rates if the share is above the cap of 400 US dollars on March 19, 21. Dollar quoted (buffer 13.9 percent). Otherwise, investors will receive a cash settlement equal to the closing price.
Discount strategy June with 18 percent buffer
Investors who have a longer investment horizon could rely on ISIN DE000HR39SX6: The identical cap at 400 US dollars and the price of 276.29 euros results in a maximum return of 53.43 euros or 35.4 percent pa if the share closes at or above the cap on the valuation day (6/18/21), otherwise a cash settlement will also be made here.
Discount strategy June with a 25 percent buffer
If you are looking for a larger buffer, you can opt for a longer term and a lower cap: The discount certificate with ISIN DE000HR39SR8 is due on June 25, 21 and offers a buffer of 25.4 percent at a price of EUR 250.76. The return is EUR 29.60 or 21.6 percent p.a., provided that the cap of USD 340 is not fallen below on the valuation date June 18, 21.
CertificateReport conclusion: Anyone who wants to include the popular tech company in their portfolio can benefit from stagnating or even slightly downward trends with the discount certificates. It’s an exchange rate risk – appreciation of the euro vs. US dollars – to be considered.
This article does not constitute a recommendation to buy or sell Zoom shares or investment products based on Zoom shares. No liability is assumed for the correctness of the data.
Author: Thorsten Welgen
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