Buffett’s Berkshire Hathaway Buys 1.3M More DaVita Shares

Buffett’s Berkshire Hathaway Buys 1.3M More DaVita Shares
By Mark Hirschey (Work of Mark Hirschey) [<a href="http://creativecommons.org/licenses/by-sa/2.0">CC BY-SA 2.0</a>], <a href="https://commons.wikimedia.org/wiki/File%3AWarren_Buffett_KU_Visit.jpg">via Wikimedia Commons</a>

Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), the conglomerate controlled by billionaire investor Warren Buffett boosted its stake in DaVita HealthCare Partners Inc (NYSE:DVA) based on its regulatory filing submitted by its portfolio manager, Ted Weschler.

Berkshire Hathaway grabs an extra 1.3M shares

The filing showed that Buffett’s conglomerate through Weschler acquired an additional 1,314,170 shares of DaVita HealthCare Partners Inc (NYSE:DVA). Currently, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) owns 36,461,294 total shares or a 17.14% stake in the kidney dialysis service provider for patients with chronic kidney failure or end stage renal disease (ESRD).

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Weschler made the additional investments for the conglomerate in four consecutive transactions from December 5 until December 9 with a price of $57.11 to $59.87 per share. He started building Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)’s stake in DaVita HealthCare Partners Inc (NYSE:DVA) in the fourth quarter of 2011.  Back then, the stock was trading at around $36 per share.

Buffett’s conglomerate signed an agreement that it will not acquire more than 25% of the total shares of DaVita HealthCare Partners Inc (NYSE:DVA). Over the past 52-week range, the stock price of the kidney dialysis provider climbed from $52.75 to $65.67 per share.  The shares of the company were trading around $62.02 a share after hours, up by nearly 1%.

Weschler, Combs on a hot streak

Buffett hired Weschler and Todd Combs as portfolio managers over the past few years. In 2012, both of them delivered double-digit returns better than the market. As a result, the billionaire investor increased the amount of funds managed by his Weschler and Combs by almost $5 billion each.

Weschler’s investments for Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) in DaVita HealthCare Partners Inc (NYSE:DVA) costs around $1.7 billion, which accounts for 34% of the funds under his management.

Last year, Buffett praised the performance of Weschler and Combs in his letter to shareholders. He wrote that the “new investment managers, have proved to be smart, models of integrity, helpful to Berkshire in many ways beyond portfolio management, and a perfect cultural fit.”

DaVita HealthCare Partners Inc (NYSE:DVA) operated more than two thousand outpatient dialysis center in the United States. It has also 66 dialysis centers in ten other countries. Over the past five years, its revenue per share increased 11.3%, EBITDA climbed 13%, and its free cash flow rose by 24.1%. DaVita’s book value increased at annual basis of 17.1%.  Last year, the company reported 14.1% return on equity and 2.2% return on assets. Its gross margin was 31.9%.

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