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Safeguard gains 15 percent on analyst ratings

    Safeguard Scientifics Inc. (NYSE: SFE) jumped 15 percent Friday as a batch of analysts kicked off coverage of the stock with bullish ratings.

    Shares in the holding company, now focused on the Internet infrastructure market, were up 7 7/8 to 58 3/8. The stock has slid recently since announcing in February it would split its stock, offer another 10 million shares to the public, and get a new CFO.

    SFE, which allows investors to buy into the companies it spins off in IPOs, has had average annualized returns of 162 percent on its IPOs this year, according to a report from Lehman Brothers. Of its network of over 250 companies, there are now 25 private internet companies in its pipeline, 21 of which are infrastructure companies.

    Prudential raised its rating on the stock from "accumulate to "strong buy."

    Merrill Lynch started the stock at a "near-term buy/long-term buy."

    Deutsche Banc Alex Brown called the stock a "strong buy"

    Lehman Brothers started the stock at "buy" and a $100 price target. In a research note, analyst Jeffrey Kessler said the company will continue to drive returns by creating deal flow and accelerating partner company success.

    Safeguard is uniquely positioned as the only incubation and management company focusing exclusively on the exploding Internet infrastructure market, Kessler said. Though the stock "is likely to be highly volatile... it is an excellent investment for risk-tolerant investors looking for exposure to and returns from Internet infrastructure, " he added.


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