Davita Stock’s March to $100

Although it does not receive much coverage, healthcare company Davita has quietly become one of Berkshire Hathaway’s fifteen largest holdings. Davita is a $12 billion company, and Berkshire owns 19.2% of the stock, which carries a present value of $2.3 billion. Since becoming publicly traded in 1995, Davita has compounded at a rate of 13.2% annualized, turning every dollar invested in the stock into just shy of $17 over this time frame.

What I like about the business is the simplicity and necessity of its business model. It provides dialysis services and aids in other treatments for kidney failure at an average rate of $350 per treatment, approximately 7% or $24.50 of which flows through to shareholders as net profits after all expenses including taxes are paid.

Over the past ten years, demand for Davita’s dialysis services have grown by a whopping 18% annualized rate, and Davita’s own internal projections … Read the rest of this article!