DaVita: High Debt Load, And Increased Interest Expenses

Summary

• DaVita is a stock that has been in Warren Buffett's portfolio for many years.
• Now the company is under short-term pressure from higher patient costs, labor issues, higher interest expenses, and lower patient volumes.
• While lower patient volumes may be temporary, the company still has a significant debt load that is too high to sustain in this climate of rising interest rates.
• DaVita is on hold because we don't see an optimistic outlook for the near term due to ongoing pressures, and the stock's valuation is considered "reasonably valued," in my opinion.

Brett_Hondow

Introduction

DaVita (NYSE:DVA) is a stock that has long been owned by Warren Buffett. He first bought a stake in the fourth quarter of 2011 and now DaVita comprises 0.9% of his total equity portfolio (his 11th largest equity position). Since

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.