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)
These days, the vaunted equity portfolio of Berkshire Hathaway (BRKA -0.27%)(BRKB -0.32%) is bursting with massive stakes in some of the world’s best-known companies. There’s the nearly 228 million-share-strong Apple position, for instance, and it says something about Berkshire that this holding has actually been reduced over time.
With the company’s investing power, nearly every equity position it opens is large-scale by default. So those stakes represent large chunks of total shares outstanding. American Express is a fine example, with Berkshire owning more than 22%.
Yet Berkshire’s largest holding proportionally is in an under-the-radar company that many investors have never heard of.
Image source: The Motley Fool.
A very healthy pick
This Berkshire stake winner is — drum roll, please — DaVita (DVA -0.53%)!
Da who?
As of July 31, Berkshire owned just under 28.7 million shares of the company, a niche healthcare business that operates a network of kidney dialysis centers throughout the United States. Those shares give Berkshire a whopping stake of almost 45% in DaVita’s equity.
And the kicker is, that high percentage is after more than a year of Berkshire’s periodically trimming its stake. The mostly static position it held from 2020 to 2024 was reduced with a series of relatively small sell-offs beginning in early 2025. Since then, the holding has melted from slightly over 36.1 million shares to the present level.
It’s important to note here that, over the years, DaVita has been an aggressive purchaser of its own stock. So an outstanding share count that once stood above 240 million is now slightly over 64 million.
Since its initial DaVita purchase way back in 2011, Berkshire management has stayed mum about its reasoning for the investment. That’s probably because the DaVita buy-in was apparently the brainchild of Ted Weschler, Berkshire’s investment manager. Berkshire founder and guiding light Warren Buffett likes to expound on his own stock picks, but is usually quieter about other selections.
Portfolio standout
Those small, recent divestments could simply be acts of profit-taking. After all, DaVita stock has been quite the rock star so far this year; even after a post-earnings slide earlier this month, the company’s equity is up by more than 56% year to date. That beats the heck out of the benchmark S&P 500 index’s 12% gain.
Today’s Change
(-0.53%) $-0.95
Current Price
$179.10
Key Data Points
Market Cap
Day’s Range
$175.90 – $179.78
52wk Range
$101.00 – $247.49
Volume
316.8K
Avg Vol
847.7K
Gross Margin
27.29%
DaVita is the kind of company Buffett has always liked, and a type that his successor as Berkshire CEO, Greg Abel, seems to favor too. It focuses intensely on one essential service, has an impressively high moat as a trusted operator in a business with high barriers to entry, and is reliably profitable.
It also delivers the occasional blowout earnings report. Much of that impressive share price rise stems from the company’s beat-and-raise first-quarter earnings.
It blew past analyst estimates for adjusted profitability (which rose by 21% year over year to $198 million) and topped those for revenue, which increased 6% to over $3.4 billion. This gave management the confidence to increase its guidance for adjusted earnings per share (EPS). That’s now $14.10 to $15.20 per share, up from the previous estimate of $13.60 to $15.
Zooming out a bit, on an annual basis, DaVita almost always delivers a bottom-line profit. This can be a bit up and down, but it consistently manages to increase its revenue. Over the past four years, it’s advanced from 2022’s $11.6 billion to last year’s $13.6 billion. Analysts expect this to continue, with increases in both line items this year and next.
Still a sleeper
Businesses like Apple and American Express are relatively easy to understand, not least because of their familiarity to the average consumer in this country. Healthcare stocks can be more daunting, as some might think they offer products and services that are hard for the average Joe or Jill to comprehend.
I don’t feel DaVita is one of those companies, as it’s, again, offering a standard, straightforward medical procedure. As a stock, even with that run-up so far this year, it seems well below its ceiling — forward P/E is barely over 12, which feels inexpensive for a company that produces revenue growth and profitability more often than not.
We should never blindly follow a famous investor, powerful CEO, or well-known company into or out of an investment. So no one should own DaVita simply because it’s a Berkshire equity portfolio mainstay. That said, it looks like a fine stock to hold all on its own, underpinning a company whose growth story appears far from over.
