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Warren Buffett’s Latest Filing Reveals That He is Still Fond of DaVita HealthCare Partners Inc (DVA)

Warren Buffett and Berkshire Hathaway, in a new filing with the Securities and Exchange Commission, revealed buying a significant amount of shares of DaVita HealthCare Partners Inc (NYSE:DVA). Berkshire has acquired around 1.3 million shares, raising its holding in the company to a total of almost 36.5 million shares. The stock was acquired in four transactions, and the fund spent over $76 million.

Warren Buffett

According to the latest 10-Q report of DaVita HealthCare Partners Inc (NYSE:DVA), the company has around 212.7 million shares outstanding, which shows that Buffett’s stake amasses over 17% of the company’s common stock. Earlier in November, Mr. Buffett reported another increase in his holding in DaVita, when he acquired around 3.7 million shares.

Berkshire’s ‘bulishness’ on DaVita HealthCare Partners Inc (NYSE:DVA) could be explained by its intentions to get into the company in order to gain long-term value. The fund took advantage of the relatively low stock price to increase its exposure, paying between $57.11 and $59.87 to acquire the securities. Currently, the stock of DaVita trades at over $62 per share.

At the end of November, DaVita HealthCare Partners Inc (NYSE:DVA) has provided its outlook for the next year, on the back of the final Centers for Medicare and Medicaid Services (CMS) Medicare ESRD rule for 2014. The company forecasts enterprise operating income between $1.7 and $1.9 billion for 2014, amid an operating income of $1.4 – $1.5 billion from its dialysis services business, the company said in a statement. For the first nine months of 2013, DaVita posted an adjusted operating income of $1.41 billion.

While Berkshire’s stake in the company has been one of the largest, and with the recent increases the fund just solidified its position. In addition to Mr. Buffett, another “hedgie” that has been bullish on DaVita HealthCare Partners Inc (NYSE:DVA), according to the latest 13F filings, is Stephen Mandel of Lone Pine Capital, which initiated a position in the company during the third quarter and revealed 6.3 million shares as at the end of September. The holding of Orbis Investment Management, managed by William B. Gray, amasses 5.4 million shares, boosted by over 200% during the July-September period.

Disclosure: none

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