Warren Buffett and Greg Abel Quietly Hold a Bigger Percentage of This Company Than Any Other in Berkshire's Portfolio (Hint: It's Not Apple or American Express)

DaVita is highlighted as a Berkshire-backed healthcare “pick” with Berkshire owning ~28.7M shares (~45% of DaVita’s equity) after trimming from ~36.1M earlier in 2025, while DaVita has reduced its share count to ~64M via aggressive buybacks (from 240M+). Operationally, DaVita’s first-quarter adjusted profitability rose 21% YoY to $198M and revenue grew 6% to over $3.4B, prompting guidance for adjusted EPS of $14.10–$15.20 versus $13.60–$15.00. The article notes the stock is up 56% YTD (despite a post-earnings slide) and trades at a forward P/E just over 12, implying the market may be underpricing the growth/profitability profile.

Analysis

Berkshire’s ownership is less a fresh signal than a reminder that DVA behaves like a long-duration cash compounder with a shrinking float. That combination can inflate per-share optics faster than the underlying dialysis market grows, so much of the recent outperformance is really a buyback-fueled multiple/earnings mix rather than evidence of a structurally stronger end market.

The main loser is not an obvious same-store competitor so much as anyone upstream or adjacent that depends on DVA having weak bargaining power: staffing vendors, outsourced labor, and to a lesser extent equipment suppliers. The direct competitive read-through is harsher for Fresenius Medical Care: if DVA keeps repurchasing stock and holds reimbursement/margins steady, it can sustain superior EPS growth even in a slow-growth category, forcing FMS to spend more on retention and pricing discipline just to keep pace.

The real risk is regulatory, not operational. Dialysis is a reimbursement business with limited pricing freedom, so a small CMS rate disappointment or labor-cost inflection can hit earnings disproportionately over the next 1-3 quarters; the stock’s 12x-ish forward multiple is only cheap if guidance stability persists. Over 6-18 months, the thesis is that buybacks plus modest volume growth can keep EPS compounding, but if free cash flow softens or leverage constrains repurchases, the market will likely re-rate it back toward a utility-like multiple.

Contrarian view: the market may be overestimating Berkshire as a catalyst and underestimating how much of the bull case is mechanically driven by capital returns. This is not a moat expansion story; it is a balance-sheet/repurchase story with regulatory fragility. I would want to see the next reimbursement cycle and buyback cadence before paying up after a 56% YTD move.

Key Decisions for Investors

• Do not chase DVA after the run; initiate only on a pullback or if forward P/E resets to ~11.5x-12.5x with unchanged guidance. Risk/reward is better when the market stops paying for the Berkshire halo.
• Relative-value trade: long DVA / short FMS over 6-12 months. Thesis is that DVA’s repurchase cadence and cleaner US reimbursement exposure should translate into superior EPS compounding; exit if FMS shows material margin recovery or DVA buybacks slow.
• For existing DVA longs, buy downside protection into the next earnings/CMS window with a 3-6 month put spread. The key falsifier is any guidance cut, reimbursement surprise, or evidence that labor inflation is re-accelerating.
• Set a trim alert if DVA trades above ~14x forward EPS without a corresponding raise in full-year guidance. At that point the stock is likely discounting perfection and the next move is more likely multiple compression than another leg of fundamental rerating.