Perplexing Conexant (CNXT) added to portfolio at $88 5/16
Rated a BUY.
This company has dropped quite a bit from its $132 high. A down grade by SG Cowens last week and the RFMD getting a big QCOM contract seems to be the major reason.
CXNT per Hoovers
Conexant Systems sees its competitors like a lawn
cutter views tall grasses -- got to modem down. The company, Rockwell International's semiconductor operations until being spun off in 1998, is expanding its product lines to offset the sagging sales of its flagship PC modem chip business. Its other product divisions provide chips for personal imaging (fax machines, office peripherals, video systems), wireless communications (cordless phones, global positioning system receivers), digital infotainment (cable modems, set-top boxes), and network access (corporate hubs and multiplexers) Clients include Compaq, Ericsson, Thomson, and Cabletron Systems. The Company operates in five business segments that include Personal Computing, Network Access, Wireless Communications, Digital Infotainment and Personal Imaging.
52-Week Low on 4-Mar-1999 $8.563
Recent Price $79.813
52-Week High on 16-Feb-2000 $132.50
Book Value (mrq) $5.97
Earnings (ttm) $0.56
Earnings (mrq) $0.23
Sales (ttm) $7.90
Cash (mrq) $1.40
Price/Book (mrq)13.36
Price/Earnings (ttm) 141.26
Price/Sales (ttm) 10.10
Market Capitalization $16.2B
Shares Outstanding 202.6M
Float 200.5M
Alot of insider selling in 1/26/00-1/28/00, but quantity not too usual. Most at $73-88 range.
Chart shows a big red volume on 1/28/00 which is the insiders selling. Price was mid $80's then. MACD still positive since drop so fairly valued. Sector is hot. I dismiss the QCOM throery as this company ahas multiple revenue streams.
Today's movement means the price has finally become attractive ans it received an upgrade today.
Revenue Analysis ($ in millions)
Q1:F00 % Of Sales
PC $190.1 37%
Imaging $31.2 6%
Network Access $118.5 23%
Digital Infotainment $67.1 13%
Wireless $103.0 20%
TOTAL $510.0 100%
Source: Company reports
In short, a depressed leader in a hot sector. Short term upside is $132, the old high. Short term downside is $75. Long term this is a $180 stock, Worst case is $60 which has huge support. Earnings will make a big difference.
Monster revs - 294M to 316 to 380M to 452M to 510MDec99
EPS great - (0.30) to 0.04 to 0.12 to 0.19 to 0.24 Dec99
Jack |
