Going Under the Knife or Not
The latest spam from the Oxford Club peaked my interest this morning. I decided to track down the spruiked company which I initially thought was Accuray (ARAY). I was getting close when I stumbled on this article by Stock Gumshoe, Travis Johnson. Doh! The thrill of the hunt was gone, Travis identified Varian Medical Systems, Inc. (Public, NYSE:VAR)
Still when I glanced at Varian’s chart I thought all may not be lost. Consistent earnings growth combined with falling P/E ratio is a combination that peaks my interest.
The Oxford Club’s hyperbole aside and totally discounting the cargo screening possibilities, Varian Medical’s core life saving products appear set to deliver growth for at least a few more years. However, contrary to the Oxford Club’s claims, Varian Medical face competition from both small and large competitors.
Varian’s profits dipped in 2007 due to falling margins, but have since resumed growing. VAR has a cash flush balance sheet, excellent margins and ROE and appears to be a good medium to long term opportunity worth having a closer look at.
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