12 Best Long-Term Stocks to Buy According To Warren Buffett

7. DaVita Inc. (NYSE:DVA)

Warren Buffett’s First Major Purchase: 2011

Berkshire Hathaway’s Latest Investment Stake: $5 Billion

Number of Hedge Funds Holding Stakes as of Q2: 34

DaVita Inc. (NYSE:DVA) is one of Warren Buffett’s top investment plays in the healthcare sector. The company offers kidney dialysis, outpatient, hospital inpatient, and home-based hemodialysis services. It also operates clinical laboratories that provide routine laboratory tests for dialysis.

The company’s stock value rally over the past year can be linked to its strong performance in dialysis and associated laboratory services. The positive outlook, driven by a strong start to 2024 and significant business prospects, is anticipated to add to this trend.

DaVita Inc. (NYSE:DVA)’s worldwide market presence is consistently growing. This past year, the firm reached a deal to broaden its international activities into Brazil, Colombia, Chile, and Ecuador and extend its operations globally.

DaVita Inc. (NYSE:DVA) concluded the second quarter of 2024 with results surpassing expectations. The company’s total revenue increased to $3.2 billion, and profit margins were positive. The launch of dialysis facilities across the United States and the acquisition of facilities abroad were seen as positive developments.

The company has also raised its forecasts for its financial year 2024, affirming the underlying growth. The estimated earnings per share (EPS) for the entire year are expected to fall between $9.25 and $10.05, an increase from the earlier range of $9 to $9.80. While the stock does not offer dividends, it trades at a discount with a price-to-earnings multiple of 14.

Insider Monkey dug through 912 hedge fund portfolios for their second quarter of 2024 shareholdings and found 34 DaVita Inc. (NYSE:DVA) investors. Warren Buffett’s Berkshire Hathaway was the biggest shareholder through its $5 billion investment.

Here is what Ariel Global Fund said about DaVita Inc. (NYSE:DVA) in its first quarter 2024 investor letter:

“Leading provider of dialysis services, DaVita Inc. (NYSE:DVA) outperformed during the period following a top- and bottom-line earnings beat. DaVita is benefitting from cost saving initiatives, early signs of a normalization in patient growth trends on par with pre-pandemic levels, improved leverage and an aggressive share buyback program. The company also recently announced an expansion of its international operations in Latin America, presenting an attractive long-term growth opportunity. Furthermore, management provided a 2024 financial outlook which is well above consensus and anticipates favorable growth. In our view, we believe the market misunderstands the long-term clinical impact of glucagon-like-peptide-1 (GLP-1s) on dialysis and as such, DaVita currently trades at a significant discount relative to our estimate of its intrinsic value.”