The portfolio managers at
Warren Buffett
's Berkshire Hathaway Inc. (
BRK.A
)(
BRK.B
) have increased the company's stake in DaVita Inc. (
DVA
) by 0.65% for approximately $110 per share on Oct. 16 and 17,
2012, as reported by
GuruFocus Real Time Picks
. Berkshire bought 63,928 shares in the transaction, which
brought its total current shares owned to 10,547,040.
The DaVita purchase was Berkshire's fourth in less than a month
and brought its ownership of the company to 10.5%. Berkshire
initiated a position in DaVita in the fourth quarter of 2011 when
the price was at $71 on average. The price has increased 56%
since then and reached a new all-time high of $113.48 on
Thursday.
Denver-based DaVita is one of the largest kidney dialysis
companies in the U.S with a roughly one-third share of the
market. It operates 1,884 outpatient dialysis centers in the
U.S., where it serves approximately 149,000 patients. In
addition, it owns 19 outpatient dialysis centers outside of the
U.S.
DaVita is also a rapidly growing company, with an 18.6% revenue
per share growth rate, 17.8% EBITDA per share growth rate, and
10.8% free cash flow growth rate annually over the past ten
years.
At the end of the second quarter, the company had $1.7 billion
cash on its balance sheet, and $4.9 billion in long-term
liabilities and debt.
Several of its valuation ratios are at relatively high levels. It
has a P/E ratio of 18.46, close to a one-year high; P/B ratio of
4.14, close to a three-year high; and P/S ratio of 1.5, close to
a three-year high.
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