Berkshire Hathaway Continues to Buy DaVita

By Holly LaFon,

Shutterstock photo

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.

GuruFocus Real Time Picks alerts you for the stock purchases and sales that Gurus have made within the last two days. Follow your favorite Gurus closely with GuruFocus' Premium Membership! If you are not a Premium Member, we invite you for a 7-Day Free Trial .

Read More:

About GuruFocus: tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to Premium Members .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing
Referenced Stocks: DVA

More from GuruFocus




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by