Why Varian Medical Is Poised to Outperform

Market-trouncing returns could be written in this 4-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Feb 7, 2013 at 11:00AM
Health Care

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, oncology equipment maker Varian Medical Systems (NYSE:VAR) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Varian and see what CAPS investors are saying about the stock right now.

Varian facts

Headquarters (founded)

Palo Alto, Calif. (1948)

Market Cap

$7.8 billion

Industry

Health care equipment

Trailing-12-Month Revenue

$2.9 billion

Management

CEO Dow Wilson (since 2012)
CFO Elisha Finney (since 1999)

Return on Equity (average, past 3 years)

28.4%

Cash / Debt

$807.3 million / $206.3 million

Competitors

Accuray
Elekta
Siemens

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 404 members who have rated Varian believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, dreamjob, succinctly summed up the bull case for our community: "Varian is sporting high returns on capital, and its earnings appear to be quality in nature (operating cash flow is keeping pace with net income). I like how sales, earnings, and book value are growing, and I think I'm getting this for a fair price at $71."

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.