Behind Berkshire’s Curtain: Is Greg Abel Preparing to Cut Davita Loose?

In Tuesday trading, Davita (DVA), a leading provider of dialysis services, and Berkshire Hathaway’s (BRK.B) 16th-largest holding, hit its 23rd new 52-week low of the past 12 months at $104.24. 

Down 37% over the past year, newly-appointed CEO Greg Abel could be looking to accelerate the holding company’s sale of Davita stock as we hit the midway point of 2026’s first month.

Berkshire first acquired 2.68 million shares of Davita in Q4 2011. Its holdings maxed out at 38.57 million at the end of Q4 2014. It’s been selling in dribs and drabs over the last two years, with its most recent sale on Oct. 27, 2025, unloading 401,514 shares at an average price of $135.36. 

As a result of the latest sale, Berkshire owns 31.76 million shares of Davita, accounting for 1.1% of its $315 billion equity portfolio, but more importantly, it still owns 45.0% of the company.

My quick estimate is that Berkshire paid about $60 per share for its DaVita stock. While it’s made money on its investment, the gains may be starting to slip away. 

Now that Greg Abel is CEO, not Warren Buffett, and Todd Combs has moved on, leaving Ted Weschler as the sole portfolio manager, it could be an opportune time to lock in profits and unload the entire stake. 

Should they or shouldn’t they? Here’s my two cents.

It Totally Makes Sense to Cut Bait

Some holdings in Berkshire's portfolio have delivered substantial gains despite some lean years—American Express (AXP) and Coca-Cola (KO), the holding company’s second- and fourth-largest holdings, come to mind.

Others, like Davita, have been hit-or-miss, delivering big moves up and down since 2015. For example, in June 2015, its share price was around $85, only to lose half that by May 2019. Over the next two years, its share price increased nearly threefold, only to give back almost half of those gains over the next 18 months. 

A glance at its income statement shows that in the 14 years Berkshire has owned Davita stock, the Denver-based company has grown its revenue by 98%, from $6.73 billion in 2011 to $13.32 billion in the 12 months ended Sept. 30, 2025, a 5.0% CAGR (compound annual growth rate). Meanwhile, its EBITDA (earnings before interest, taxes, depreciation and amortization) has increased by 86% (4.5% CAGR over the same period). 

While dialysis is a vital healthcare treatment for millions of Americans, revenue and earnings growth aren’t about to take off. Making matters worse, it doesn’t pay a dividend, unlike Coca-Cola, which paid over $800 million in dividends to Berkshire in 2025, providing a valuable source of future cash. Not that it needs more, with over $381 billion as of Q3 2025.

Davita is one of just two healthcare stocks in Berkshire’s portfolio. The other— UnitedHealth Group (UNH) — was acquired in Q2 2025; the holding company purchased just over five million shares at an average price of $411.45. Berkshire’s underwater since. 

Healthcare is not where you want to be right now. Twelve analysts cover Davita stock, just two rate it a Buy.

There Aren’t Many Good Buys Right Now

Canadian economist David Rosenberg, often described as a permabear, authored an opinion piece in the Financial Post yesterday arguing that the lack of calls for a recession is a sign of irrational exuberance.   

“Let’s start with the most remarkable data point of all: not a single economist in the major consensus surveys is calling for a recession in 2026. Zero. None. This isn’t just unusual; it’s historically extraordinary. The last time we saw this degree of unanimity was in late 2007, and we all remember how that turned out. Before that? Early 2000. Sensing a pattern here?” Rosenberg wrote.

He added that valuations are historically high. “The risk-reward calculus has rarely been this unfavourable for those initiating long positions at current levels.”

I say all this to point out that it’s one thing for a piker like me to sell shares for cash and redeploy that cash somewhere else. Still, in Berkshire Hathaway’s situation, it doesn’t have a shortage, and unless Abel has some massive acquisition hidden up his sleeve, selling at this point wouldn’t move the needle for Berkshire stock. 

It already has plenty to buy overvalued stocks by the boatload right now. As the past year has shown, Berkshire’s had little inclination to do much buying — and valuations today are much higher than they were last January.

Although the Barchart Technical Opinion is a Strong Sell, the company’s business fundamentals aren’t terrible through Q3 2025. 

On the top line, revenues were $10.02 billion, 5.3% higher than a year ago, while adjusted net income per share was $7.44, up one cent from last year. While earnings were down from a year ago, the revenue was in line with historical growth norms.

As we’ve seen with Davita stock over the years, it tends to move up and down with gusto. The expected move to Dec. 18 is nearly 22%. It likely makes sense for Berkshire to buy puts with strike prices near the current share price to protect against downside risk — and wait for better exit prices.

Ultimately, what’s it going to do with an extra $3.3 billion in cash? Just add it to the pile.