Big Caps That Went Nowhere In 2006: Conexant (CNXT)

Conexant trades about 14 million shares a day. That’s about 3.5 billion shares a year. But the stock came into 2006 at $2.30 and now trades just above $2.25. A big round trip to nowhere.

Conexand sells semiconductor systems solutions and reference designs for use in broadband and enterprise deployments. The company has good partnerships with companies like Motorola.

The company does have a couple of problems. Revenue has flattened out. In fiscal Q4, ending September 30, revenue was $246 million. But, in the immediately previous quarter, revenue was $252 million.

Conexant has also had unsuccessful IP litigation with Texas Instruments, which caused the company to show a net loss of $21 million in fiscal Q4 compared to a profit of $51 million in the same quarter a year ago.

The company’s financial picture could change for the better now that its litigations issues are moving behind it and the company prepares to pay off convertible debt.

But, after jumping up to $3.90 in May concerns about the future have overridden optimism. And, the stock shows it.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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