We recently published a list of Warren Buffett’s 10 Longest-Held Stocks. In this article, we are going to take a look at where DaVita Inc. (NYSE:DVA) stands against other Warren Buffett’s longest-held stocks.
‘The Oracle of Omaha’
Known as the Oracle of Omaha, Warren Buffett will undoubtedly go down as one of the greatest and most prosperous value investors in history. During the booming stock market of the 1960s, the billionaire investor used his investment partnership to purchase Berkshire Hathaway, a struggling textile company in New England, which now stands as a global titan.
Buffett has often underlined the need to fully know the internal operations of a company before making any investments. His strategy focuses on finding companies with strong, scalable models that are ready for expansion and market leadership, as well as those that have much to gain from a subsequent increase in stock value. Both investors and market analysts have frequently praised this methodical, long-term investment strategy, particularly in light of Berkshire becoming one of the most recent non-tech companies to reach a $1 trillion market capitalization.
However, despite a generally strong market performance for much of 2024, Buffett appears to have shifted towards a more defensive stance. As interest rates climbed and economic conditions weakened, Buffett significantly reduced his holdings in companies experiencing rapid valuation increases. By late 2024, Berkshire had amassed over $325 billion in cash and cash equivalents, predominantly held in U.S. Treasury bills. This suggested that Berkshire avoided making major investments in popular stocks, even during periods of market optimism. That said, Warren Buffett’s decision to hoard cash might not be a random one. In fact, it mirrors strategies he has used in the past during previous financial downturns. As an example, the billionaire adopted a somewhat similar approach at the onset of the dot-com bubble in the early 2000s and again in the lead-up to the 2007-2008 financial crisis. In both these instances, Buffett foresaw market turbulence and positioned Berkshire to navigate the challenges by maintaining substantial liquidity.
Warren Buffett’s Stance on Cryptocurrency
Warren Buffett has repeatedly stated that he is not a fan of cryptocurrency. During Berkshire’s 2018 annual shareholder meeting, Buffett called Bitcoin “probably rat poison squared.” In Berkshire’s 2022 shareholder meeting, the billionaire once again stated:
“If you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything.”
Recent reports, however, indicate that the Oracle of Omaha seems to be softening his stance on cryptocurrencies. Berkshire has invested in Nu Holdings, a digital banking company based in Brazil that supports the cryptocurrency market and operates its own platform. In a 2021 Series G funding round, Buffett’s company contributed $500 million, followed by another $250 million. Nubank Crypto, Nu’s cryptocurrency platform, was launched in 2022 and supports Bitcoin, Ethereum, and Polygon. Berkshire’s stake in Nu increased from 0.1% in the fourth quarter of 2022 to 0.4% in the third quarter of fiscal 2024.
Our Methodology
To create our list of Warren Buffett’s longest-held stocks, we analyzed his Q3 2024 investment portfolio and selected stocks that he has consistently held for the longest duration. These figures were sourced from the Insider Monkey Database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Clinical laboratory technicians running tests in the comprehensive kidney care services.
DaVita Inc. (NYSE:DVA)
Warren Buffett’s First Major Purchase: 2011
Berkshire Hathaway’s stake in Q3 2024: $5.91 billion
DaVita Inc. (NYSE:DVA) is a leading kidney dialysis provider in the United States, operating 367 facilities in 11 countries and 2,675 outpatient centers domestically. DaVita Inc. (NYSE:DVA) has long been a favorite stock in Warren Buffett’s portfolio. The Oracle of Omaha has owned the healthcare stock since the fourth quarter of 2011, making it one of his most consistent investments.
DaVita Inc. maintained its adjusted operating income guidance for 2024 of $1.91 billion to $2.01 billion in Q3 2034. In the quarter, the company reported earnings per share of $2.59 and adjusted operating income of $535 million. With 2028 as the closest maturity date, the company has effectively managed its debt, and its leverage is within the desired range.
Moreover, DaVita Inc. (NYSE:DVA) successfully handled operational difficulties, minimizing the effects of hurricanes and continuing to control labor and medical expenses. The company is preparing for a regulatory shift involving oral-only medications into Medicare Part B, which could improve patient access and efficiency, and expects supply chain conditions to return to normal by early 2025.
Overall, DVA ranks 6th on our list of Warren Buffett’s longest-held stocks. While we acknowledge the potential of DVA, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DVA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
