But sadly, Sparky has undergone a recent change of heart; primarily because of two persistent variables Sparky fears could spell ultimate danger.

First and foremost, particularly in light of the major high-volume sell off these shares experienced back in July, Sparky finds it particularly unsettling that institutions currently own a whopping 95% of VAR’s outstanding shares, or 98% of the firm’s trading float!

What’s discomforting about this huge institutional ownership position is that virtually every single one of them is positioned to book sizable gains, gains which up until now are simply “paper profits.” Specifically, Sparky can’t help suspecting that the managers of many funds now holding VAR shares at a sizable gain will book those gains between now and year end.

Commonly known as “window dressing,” gains booked before year end not only boost the fund’s overall performance, but also raise all the compensation levels that are tied to the fund’s performance.

A second variable that Sparky thinks has reached a point of justified concern is all the recent insider selling. Why in just the past 12 months there have been 24 filings involving 680,340 shares; and the vast majority have been sales.

Varian’s CEO Dick Levy leads the pack with an open market sale on 11/02/2004 of 180,000 shares ($ 7,098,930), but Elisha Finney, VAR’s Chief Financial Officer, was not far behind with an open market sale on 11/02/2004 of 50,000 shares ($ 2,001,252).

Sparky’s got to seriously wonder why those who are managing an industry leader with such a nice balance sheet just don’t seem to want to hold onto VAR shares. So if they personally think that their funds are better off invested elsewhere, then so does Sparky.

In conclusion, for the reasons mentioned above, Sparky no longer recommends the accumulation of VAR shares. In contrast, those in a position to realize a gain are urged to do so without delay.

As an alternative investment, Sparky urges readers to check out the shares of Tiger Telematics (TGTL), now trading at around $ 22. TGTL’s the company behind Gizmondo, an incredible Windows powered mobile gaming device that will be launched in the US next quarter. Tiger Telematics has already cut a deal with Microsoft to sell MSFT and X-Box games for use on the Gizmondo. Lots more information about the Gizmondo can be found at www.gizmondo.com.

Those wishing to remain in a health care issue are urged to check out the shares of Pediatric Prosthetics (PDPR), now trading at around 11 cents. As the name implies, PDPR is in the artificial limb business with a concentration on children. Those interested in this potentially-explosive little stock should check out PDPR’s neat website at www.kidscanplay.com.

Thanks for the gains Varian Medical, Sparky bids you farewell –

Sparky