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Varian Medical Systems, Inc. (VAR): Are Hedge Funds Right About This Stock?

Seeing as Varian Medical Systems, Inc. (NYSE:VAR) has sustained falling interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedge funds who sold off their full holdings in the third quarter. It’s worth mentioning that First Eagle Investment Management got rid of the biggest investment of the 700 funds monitored by Insider Monkey, totaling about $355.7 million in stock. Ernest Chow and Jonathan Howe’s fund, Sensato Capital Management, also cut its stock, about $4.7 million worth.

Let’s also examine hedge fund activity in other stocks similar to Varian Medical Systems, Inc. (NYSE:VAR). We will take a look at Lennar Corporation (NYSE:LEN), Aramark (NYSE:ARMK), Akamai Technologies, Inc. (NASDAQ:AKAM), and XL Group plc (NYSE:XL). This group of stocks’ market caps match VAR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LEN 48 1132322 8
ARMK 26 1092408 -7
AKAM 36 707311 6
XL 22 436854 1

As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $842 million. That figure was $188 million in VAR’s case. Lennar Corporation (NYSE:LEN) is the most popular stock in this table. On the other hand XL Group plc (NYSE:XL) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Varian Medical Systems, Inc. (NYSE:VAR) is even less popular than XL. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None