Warren Buffett's Berkshire Hathaway has made headlines recently by reducing its stake in DaVita Inc., a leading healthcare provider specializing in dialysis services. On February 11, the investment giant sold 203,091 shares, bringing its total ownership down to approximately 35.89 million shares, still representing a significant 45% stake valued at nearly $6.4 billion. This strategic move is part of a share repurchase agreement that requires DaVita to periodically buy back shares, ensuring that Berkshire maintains its substantial ownership level.

While DaVita’s fourth-quarter earnings report showed promise, exceeding analysts' estimates with earnings of $2.24 per share, investor sentiment has been negatively impacted by the company’s weak profit outlook for 2025. The company projects adjusted earnings between $10.20 and $11.30 per share, falling short of market expectations. Contributing to this cautious outlook are rising patient care costs and significant expenses related to U.S. dialysis center closures, totaling $24.2 million.

The company's stock experienced a notable decline, with shares dropping over 12% following the profit outlook announcement. The stock price faced additional pressure when Berkshire Hathaway sold $1.24 billion in DaVita shares, culminating in an 11.1% drop – the largest one-day decrease in nearly two years.

Overall, Berkshire's recent divestments and DaVita’s challenges create a mixed picture for investors. While the company remains one of Berkshire's largest equity holdings, potential investors should weigh the recent profit outlook and internal challenges against the backdrop of Berkshire’s evolving investment strategy.

Berkshire Hathaway Reduces Stake in DaVita, Leading to Stock Decline Amid Profit Concerns

Berkshire Hathaway, under the leadership of Warren Buffett, has recently made significant adjustments to its stake in DaVita Inc., the prominent dialysis provider. Between February 14 and 19, Berkshire sold 750,000 shares, reducing its ownership to approximately 35.14 million shares, a decrease of about 2%. This follows an earlier sale of over 203,000 shares on February 11, which brought Berkshire’s ownership down to roughly 35.89 million shares, or 45%.

The backdrop for these sales includes DaVita's disappointing profit outlook for 2025, with projected adjusted earnings between $10.20 and $11.30 per share, falling short of analysts' expectations. The company experienced over a 12% decline in stock price, largely attributed to rising patient care costs, including a significant $24.2 million charge related to the closure of U.S. dialysis centers. Despite reporting fourth-quarter earnings of $2.24 per share that exceeded estimates, investor sentiment continues to be cautious.

Berkshire Hathaway’s recent transactions highlight a broader strategy of portfolio adjustment, including a notable sale of shares valued at $1.24 billion, leading to an 11.1% drop in DaVita's stock price—the largest decline in nearly two years. With DaVita remaining one of Berkshire's major equity holdings since 2011, investors should monitor the company's performance closely, especially in light of rising expenses and its weak earnings guidance moving forward.

Berkshire Hathaway Sells $1.24 Billion in DaVita Shares, Reducing Stake Amid Weak Profit Outlook and Rising Costs

DaVita Inc. has experienced significant stock volatility recently, leading to a notable decline in its shares. As of February 16, 2025, the company's stock fell by over 10% due to its disappointing profit forecast for 2025, projecting adjusted earnings between $10.20 and $11.30 per share—below analysts' expectations. This forecast is primarily attributed to increasing patient care costs, which include $24.2 million in charges related to the closure of U.S. dialysis centers.

The news has been further exacerbated by the actions of Berkshire Hathaway, DaVita's largest investor, which has reduced its stake from what was previously a considerable holding. The firm sold off 203,091 shares, resulting in a decreased ownership of approximately 45%. This reduction reflects Berkshire's long-term investment strategy, as DaVita ranks as their 10th largest equity holding, held since 2011.

Despite DaVita's fourth-quarter earnings of $2.24 per share surpassing estimates, investor sentiment remains bearish. The company's stock not only faces pressures from its weak profit outlook but also from a broader market context where other major firms, such as Nvidia and Tesla, have reported gains.

Investors should approach DaVita with caution, considering both its rising healthcare costs and the implications of Berkshire Hathaway's reduced stake, which may signal a lack of confidence in the company's near-term prospects. The overall economic environment, including concerns over inflation and retail sales, also plays a crucial role in shaping investor sentiment in the healthcare sector.

DaVita Shares Plunge 10.1% Amid Disappointing Profit Forecast and Berkshire Hathaway Stake Reduction

DaVita Inc. has been under significant pressure following a series of developments that have rattled investor confidence. On February 11, 2025, Berkshire Hathaway, led by Warren Buffett, sold 203,091 shares of DaVita, reducing its stake to approximately 35.89 million shares, or 45%. This sale is part of a share repurchase agreement, which also requires DaVita to buy back shares quarterly to maintain this ownership level. The implications of this action contributed to a negative sentiment surrounding the company’s stock.

Shortly after the sale, DaVita's shares plummeted 10.1% as the company forecasted its annual profits would fall below analysts' estimates. The projected adjusted earnings per share (EPS) for 2025 were expected to range between $10.20 and $11.30, underwhelming investor expectations amidst rising healthcare costs and operational challenges. The company's fourth-quarter earnings report did show EPS of $2.24 and revenue of $3.3 billion, surpassing predictions, but the weak outlook overshadowed these results.

Compounding the company’s woes, concerns regarding elevated mortality and mistreatment rates among patients have further exacerbated worries about new patient growth. As a result, DaVita's stock saw a steep drop of over 12% in recent days, reflecting broader concerns amidst a fluctuating market influenced by economic pressures including rising inflation and mixed retail sales data.

Investors should remain cautious and closely monitor DaVita's developments, particularly its ongoing response to cost challenges and the potential for further guidance adjustments in the coming quarters.

DaVita's Shares Plummet Amid Disappointing Profit Forecast and Berkshire Hathaway Stake Reduction

DaVita Inc. is a leading provider of kidney care and dialysis services in the United States. The company's mission is to be the trusted partner in improving the quality of life for patients with chronic kidney disease. DaVita Inc. employs a patient-centric strategy, focusing on innovative treatment options and comprehensive care management. With a network of outpatient dialysis centers and a commitment to community health, DaVita Inc. aims to enhance patient outcomes through personalized care, education, and support, while also striving for operational excellence and sustainable growth in the healthcare sector.

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