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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (1313)	6/13/2000 5:50:00 PM
From: wlheatmoon	Read Replies (1) \| Respond to of 2850

Story Stocks 15:11 ET ****** Conexant Systems (CNXT) 39 1/2 -4 1/2: CNXT shares have rebounded only slightly from this morning's low of 37 7/8, but still trade 10% lower than yesterday's close after rumors hit the stock pre-market. Word on the trading floors was that Chase H&Q was making negative comments and questioning the company's ability to make their numbers this quarter. Now we haven't received an official note out of Chase H&Q, but the stock opened three points lower, and that call is widely credited for today's drop. In response, CSFB analyst, Charlie Glavin, has issued a note stating that he spoke with Conexant's CFO, Bala Iyer, and the recent concerns over the health of the company's modem business in the PC division are unfounded and he remains comfortable with the consensus $0.22 EPS estimate. We are inclined to trust Glavin on Conexant. Last quarter, SG Cowen downgraded Conexant on a valuation call and the stock took a disproportionate beating during the NASDAQ correction. It was Glavin that came to the defense of the stock and correctly predicted upside to both top and bottom line estimates for the quarter. The concerns surrounding the quarter stem from slower PC sales -- CNXT derives approximately 36% of their revenues from analog modems. Sales in that particular business segment are apparently not tracking as anticipated according to Analyst, Jeff Lipton of Chase H&Q. Lipton also cites the recent decision by the Korean Ministry of Information and Communication to ban the country's five carriers from subsidizing handsets to attract new customers as making wireless revenues a very big risk at Conexant. We will stand by Glavin's view as we have not seen any signs that mobile wireless subscriber growth is slowing and CNXT (which makes power amps for CDMA applications) is uniquely positioned to benefit from the deployment of third generation (3G) mobile wireless networks based on CDMA. As the largest pure-play communications chip company, the company is very closely scrutinized, and we believe the recent short-term panic has created a buying opportunity for long-term investors. Without refuting Lipton's call regarding slower PC Division sales in the current quarter, we see Conexant as a good long-term play in the wireless communications space and cite their dominant market position in analog modems and technological leadership in CDMA chips as rationale. - Matt Gould, Briefing.com