Warren Buffett buys more of stock pick DaVita on the drop

07/08/2013 5:54 pm EST


Jim Jubak

Founder and Editor, JubakPicks.com

I guess Warren Buffett’s Berkshire Hathaway (BRK.A) is a bigger short-term risk taker than I am.

Buffett’s company increased its stake in DaVita Healthcare Partners (DVA) by $73.4 million after the stock dropped by almost 6% on July 2 after the U.S. Medicare System proposed cutting its payments for dialysis services by 9.4% in 2014. (For more on the proposal, the drop, and DaVita and its major competitor in the sector, Fresenius, see my post http://jubakpicks.com/2013/07/03/davita-takes-a-hit-on-proposed-medicare-cuts-but-i-still-like-the-business-model-for-this-stock-pick/ ) Berkshire Hathaway now owns 15.6 million shares.

In my July 3 post on DaVita I had recommended waiting to buy because I felt that Wall Street analysts would be busy cutting their earnings estimates on the news until the company reported earnings n August 11. The stock might show further weakness then if the company cut guidance for the rest of 2013.

DaVita is a member of my Jubak’s Picks portfolio http://jubakpicks.com/ . The shares closed up 2.03% today.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , I liquidated all my individual stock holdings and put the money into the fund. The fund did own shares of DaVita HealthCare Partners as of the end of March. For a full list of the stocks in the fund as of the end of March see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/

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