On Apr 2, 2013, shares of
DaVita HealthCare Partners Inc.
) hit a 52-week high of $128.74.
In Jan 2013, DaVita acquired 5 dialysis centers in Portugal
and 4 in Poland from rival Fresenius Medical Care. In the same
month, the company also entered Taiwan through a joint venture
with Riches Healthcare to form DaVita Taiwan.
Over the past year, DaVita has expanded its global reach
through significant acquisitions and alliances in the rapidly
developing economies of Malaysia, Saudi Arabia, China, India and
Germany, among others.
DaVita reported positive earnings surprise in 3 of the 4
quarters in 2012, with an average beat of 1.29%. The Zacks
Consensus Estimate for the first quarter is currently pegged at
$1.78, representing a year over year increase of 22.2%.
DaVita has been generating strong operating cash flow based on
improved earnings, robust cash collections and the timing of
payments for working capital expenditures. Operating cash flow
increased at a 3-year CAGR (2009-2012) of 18%.
Moreover, DaVita is rapidly expanding its international
presence and is actively acquiring domestic companies. The merger
with HealthCare Partners, in Nov 2012, is supporting and
augmenting the company's primary care and specialty physician
services as well as hospital and other healthcare services.
The valuation of DaVita looks reasonable. Although the forward
price-to-earnings and price-to-book value ratios are higher than
peers, the return on equity of 20.9% is higher than the peer
group average of 17.5%. The 1-year return from the stock is
41.1%, much above S&P'sreturn of 11.5%.
DaVita currently carries a Zacks Rank #3 (Hold). Other
healthcare companies worth considering are
Addus HomeCare Corporation
) - Zacks Rank #1 (Strong Buy),
China Cord Blood Corporation
) - Zacks Rank #2 (Buy), and
) - Zacks Rank #2 (Buy).
ADDUS HOMECARE (ADUS): Free Stock Analysis
CHINA CORD BLD (CO): Free Stock Analysis
DAVITA INC (DVA): Free Stock Analysis Report
LCA-VISION INC (LCAV): Free Stock Analysis
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