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Varian Medical Systems Inc.

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Over the past six months, Varian outperformed the broader industry trends with respect to price performance. However, the estimate revision trend witnessed no changes over the last two months. Varian registered an impressive fourth-quarter of fiscal 2016, beating the Zacks Consensus Estimate on both counts. The company has been addressing both the tier 1 and mid-tier markets through its Edge, Truebeam and VitalBeam products. Varian also won contracts in the American and international markets, which is a huge positive. We believe China and Africa present significant top-line growth opportunities in the near term. The company is also on track to open new offices in Africa and the Middle East, which reflects its awareness about the growth opportunities in the region. On the flip side, intensifying local competition is a primary headwind. Moreover, the Imaging Components business spin-off will remain an overhang on the stock, at least in the near term.

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