This Warren Buffett Stock Is Up 58%. History Says This Is What Happens Next.
This Warren Buffett Stock Is Up 58%. History Says This Is What Happens Next.
James Halley, The Motley FoolTue, September 29, 2026 at 10:03 AM UTC
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Image source: Getty Images.Key Points -
DaVita reported double-digit EPS growth in the second quarter.
Berkshire Hathaway owns roughly 45% of DaVita stock.
Berkshire generally doesn't have long-term positions in healthcare stocks.
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Berkshire Hathaway(NYSE: BRKB), run until just recently by billionaire investor Warren Buffett, owns roughly 28 million shares of DaVita(NYSE: DVA), worth roughly $5.18 billion at its most recent share price
The healthcare stock is up more than 58% so far this year, outperforming the sector's sluggish returns. Berkshire Hathaway typically doesn't hold healthcare investments as long as it does in other sectors. DaVita provides dialysis services to patients with end-stage renal disease.
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Based on Berkshire's history, I think it is likely to continue taking profits on the stock as it trims its position. Here's why.
It has already been cutting back its position
Berkshire reached a peak holding of more than 38 million shares of DaVita in 2020. However, SEC filings disclose that Berkshire has executed multiple sales of DaVita shares across recent quarters. In the first and second quarters of 2026, Berkshire reported net reductions in its DaVita position, selling off blocks of more than 1.2 million to 1.6 million shares per quarter as the stock rallied.
Berkshire wants to lessen its ownership percentage
DaVita actively buys back its shares, including a $2.2 million share repurchase in the second quarter. Because DaVita aggressively repurchases its own shares, Berkshire's ownership percentage of the company often creeps up, and it now owns more than 45% of DaVita.
Berkshire generally avoids owning more than 30% to 35% of an outside company unless it plans to acquire it entirely, as higher ownership creates regulatory and reporting complexities.
Berkshire will almost certainly continue to trim shares incrementally. Selling into strength allows it to lock in massive multihundred-percent gains while keeping its total ownership percentage in check as DaVita buys back stock.
The stock has become pricey
It's hard to compare DaVita to many stocks because it essentially operates in a duopoly in the United States. Its sole real competitor is Germany-based Fresenius Medical Care(NYSE: FMS). Fresenius operates more than 2,500 outpatient dialysis clinics in the U.S. and holds roughly 34% to 38% of the domestic market share, roughly the same as DaVita's.
DaVita has 3,266 outpatient dialysis centers, of which 2,671 centers were the United States, and 595 are in 14 other countries.
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Fresenius, though, trades at lower multiples than DaVita for trailing or forward earnings.
However, that doesn't mean you shouldn't buy DaVita stock
The bull case for DaVita is complicated. The rise of GLP-1 weight-loss and kidney-protective drugs initially sparked fears of declining chronic kidney disease (CKD) patient populations, but these treatments primarily delay rather than eliminate the progression to kidney failure.
In the second quarter, DaVita reported revenue of $3.55 billion, up 5% year over year, and earnings per share (EPS) of $4.02, up 55% from the same quarter a year ago.
By keeping high-risk cardiovascular and diabetic patients alive longer, preventative therapies may ultimately enlarge the pool of individuals who eventually require long-term dialysis later in life. According to a study by the Business Research Company, the kidney dialysis market size was $90.88 billion in 2025 and is expected to grow to $134.49 billion market by 2030 at a compound annual growth rate (CAGR) of 8.2%.
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James Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
Source: “AOL Money”
