Warren Buffett-led Berkshire Hathaway (BRK.A) (BRK.B) trimmed another 2% stake in DaVita Inc. (DVA) by selling 750,000 shares. Berkshire is a majority owner (more than 10% owner) of DaVita, holding roughly a 44% stake in the kidney dialysis service provider. The latest stock sale took place between February 14 and February 19, amounting to proceeds of approximately $116 million.
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This is Berkshire’s second large sale of DaVita’s stock. The investment conglomerate recently sold 203,091 shares of the company, bringing down its ownership to 45%. However, the earlier sale was an Uninformative Sell transaction related to a share buyback agreement to reduce Berkshire’s stake to 45%. In comparison, the latest sale is an Informative Sell trade. However, the reason for the sale remains unknown.
A corporate insider’s share sale usually signals caution about the company’s future potential. However, an insider might sell shares for other reasons, such as financial or personal obligations.
A Closer Look at the Insider’s Transactions
As per Form 4 filed with the SEC on February 19, Buffett sold 750,000 DVA shares in multiple tranches at weighted average prices ranging between $150.7799 and $159.1583 apiece.
It is important to note that, even after the new stock sale, Berkshire still owns 35.14 million of DaVita stock, worth about $5.4 billion. Berkshire has been one of the early investors in DaVita, buying a majority stake in the fourth quarter of 2011.
DaVita’s stock price plunged more than 11% on February 14 after the company reported an earnings beat but gave a weak outlook for Fiscal 2025.
Is DVA a Good Stock to Buy?
Analysts prefer to remain on the sidelines on DaVita stock owing to the company’s challenges with rising patient care costs and health benefit expenses.
On TipRanks, DVA stock has a Hold consensus rating based on four unanimous Hold recommendations. Also, the average DaVita price target of $172.67 implies 11.4% upside potential from current levels. In the past year, DVA stock has gained nearly 26%.
