Warren Buffett had a nice early Christmas bonus last year. Fifteen days before Christmas 2017, On December 15, 2017, it was announced by Berkshire Hathaway, of which Buffett is Chief Executive Officer of, took in two hundred ninety-five million dollars increase in their shareholdings since Berkshire Hathaway has a twenty percent share in Devita company stock. Warren Buffett and his company Berkshire Hathaway is the largest shareholder in Davita noted for their kidney dialysis centers throughout the country.
In December of last year, it was announced that UnitedHealth paid $4.9 billion for a division of Devita, the kidney dialysis center operator. UnitedHealth will merge Davita, and it’s outpatient surgical and kidney dialysis centers into UnitedHealth’s Optum group. After the deal with Davita and UnitedHealth was released, Davita’s shares rose over 10%.
This is not Buffett first interest in health care, but certainly his most successful. In the early 2000s, Berkshire Hathaway once invested in UnitedHealth and WellPoint but sold those off in 2010, about the time the Affordable Health Care Act was transforming the health insurance industry. Buffett also once had a high stake in Johnson and Johnson but has slowed in its stock holdings in the company.
This has been a major win for Buffett with his stake in Devita. It has not always been that easy! In 2011, Devita shares traded at about $38 dollars a share, and then rose to $75 a share by end of 2014. Before the UnitedHealth accounted buying Devita outpatient surgical and kidney analysis centers, Devita stock has fallen again 20 percent to about $75 a share.
Again, Warren Buffett strikes gold, and he and his company win big. It will be interesting to see what happens now since Amazon.com has expressed interest in pursuing the pharmacy business and how Warren Buffett will react to these rapidly changing trends in the medical industry. If history continues to repeat itself, Buffett and his company will continue to prosper.