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I, too, have been studying Varian this weekend. Much of it is tempting: great EPS/RS rankings, hot industry, classic breakout from cup/handle. Although it has debt, it's cash/debt ratio is 1.125.
On the down side: As you said, poor margins. Also, Fool Ratio is 0.88--the stock is a little pricey for it's TTM earnings. Flow ratio is 1.45--not bad. But interestingly, the stock gained 12% Friday. Although it was on great volume, stocks will often pull back a bit after a big gain--even as they head higher. It's closing price (52 13/16) is still within 5% of it's pivot--so yes, it's very tempting. Good luck.
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