Safeguard Scientific, Mustang Software, Cymer

A selection of some of the more intriguing tech stock ideas on the Web. The items presented do not represent the views of TheStreet.com; rather, the collection is offered as a service to our members who may be scanning the Web for stock-related information.

Safeguard Scientific
Steve Harmon (3/18)

Safeguard Scientific (SFE) is much like a venture capital firm that targets companies in the information technology arena. Its shares rocketed 25% on March 16 after its chairman went on CNBC and announced the company was committed to investing in the Internet. But Internet analyst Steve Harmon says Safeguard shares may not be quite ripe for Internet-type valuations.

Safeguard already was an investor in Internet firms, VerticalNet (VERT) among them. It also owns Vision Systems, which has plans to go public and which identifies computer users by their fingerprints. Safeguard could be dismissed as merely playing catchup in the Internet space if not for its $2.275 billion in revenue in 1998 and its $1.7 billion market cap, says Harmon.

Still, Safeguard is no CMGI (CMGI), a premier Internet holding company. It would take a "huge sustainable home run" to get there, Harmon says, adding that VerticalNet one day could be it.

More information can be found at: www.internetnews.com

Mustang Software
Phil Harvey (3/17)

Mustang Software (MSTG) is a former maker of computer bulletin-board software. When the Internet wiped out that business, Mustang reemerged as a maker of email-management software. Its flagship product, Internet Message Center, helps companies route and respond to customer-complaint email. 3Com's (COMS) Internet marketing division announced this week it was adopting the product, but it's too early to write the comeback story, says Upside.com's Phil Harvey.

Mustang's stock rose 1 to 3 7/32 on the 3Com announcement. The company also has contracts with Lucent (LU) and Time Warner New Media, among others. Meridian Capital Group analyst Lynn Trepp expects the company's fiscal 1999 revenue to grow 95% to $3.9 million.

But Gartner Group's Carter Lusher warns that email management software may eventually be swallowed into front-office applications and/or telephony infrastructure. "They've managed to postpone the glue factory for now, but they need to do more," Lusher tells Harvey.

More information can be found at: www.upside.com

Cymer
Online Investor (3/17)

Cymer (CYMI) makes laser systems used in the production of semiconductors. The company commands an 80% share of the market for excimer lasers, a key technology in the industry's transition from 0.35 micron chips to even smaller 0.25 micron chips over the next few years. The transition requires an "unprecedented investment in semiconductor manufacturing equipment," says Online Investor, and Cymer's lasers are a critical component.

Influential chip analyst Jay Deahna of Morgan Stanley Dean Witter this week upgraded chip equipment stocks, including Cymer, to "strong buy" from "outperform," signaling the slumping industry has turned the corner. The upturn has been anticipated for months, says Online Investor, helping Cymer's stock to rise to 26 from a low of less than 6 last October.

Deahna has raised his 1999 earnings forecast for Cymer by a nickel to 12 cents a share and his 2000 estimate by a dime to $1.25. "Cymer is at the center of the emerging generation in chipmaking," says Online Investor.

More information can be found at: fnews.yahoo.com

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