Should You Sell Varian Medical Systems, Inc. (VAR)?

Is Varian Medical Systems, Inc. (NYSE:VAR) a good investment?

In the financial world, there are a multitude of indicators investors can use to track their holdings. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can beat the S&P 500 by a very impressive amount (see just how much).

Equally as crucial, positive insider trading activity is a second way to look at the financial markets. Just as you’d expect, there are plenty of incentives for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this method if you know where to look (learn more here).

Now that that’s out of the way, let’s discuss the newest info surrounding Varian Medical Systems, Inc. (NYSE:VAR).

How are hedge funds trading Varian Medical Systems, Inc. (NYSE:VAR)?

In preparation for the third quarter, a total of 20 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly.

Out of the hedge funds we follow, David Blood and Al Gore’s Generation Investment Management had the largest position in Varian Medical Systems, Inc. (NYSE:VAR), worth close to $252.5 million, comprising 4.9% of its total 13F portfolio. Sitting at the No. 2 spot is Natixis Global Asset Management of Harris Associates, with a $230.9 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other peers with similar optimism include Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, Andreas Halvorsen’s Viking Global and Anthony Bozza’s Lakewood Capital Management.

As Varian Medical Systems, Inc. (NYSE:VAR) has experienced declining interest from the top-tier hedge fund industry, we can see that there was a specific group of hedgies that decided to sell off their entire stakes last quarter. Interestingly, Jim Simons’s Renaissance Technologies said goodbye to the largest investment of the 450+ funds we watch, totaling close to $21.8 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also sold off its stock, about $5.7 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in Varian Medical Systems, Inc. (NYSE:VAR)

Insider buying made by high-level executives is most useful when the company in focus has experienced transactions within the past 180 days. Over the last six-month time period, Varian Medical Systems, Inc. (NYSE:VAR) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Varian Medical Systems, Inc. (NYSE:VAR). These stocks are Boston Scientific Corporation (NYSE:BSX), Smith & Nephew plc (ADR) (NYSE:SNN), Hologic, Inc. (NASDAQ:HOLX), Edwards Lifesciences Corp (NYSE:EW), and ResMed Inc. (NYSE:RMD). This group of stocks belong to the medical appliances & equipment industry and their market caps are similar to VAR’s market cap.