Berkshire's Hedge on Public Health - Kapitall Blog (blog) PDF Print

If there’s one thing American’s love to do, its satisfy their sweet tooth with candy and soda. However, these products do not exactly conform with the hope of a long and healthy life. Yet improvements in medical technology are increasingly able to treat the inevitable side effects of obesity-related illnesses, all while reaping in a healthy profit.

One of the great benefactors are those in the dialysis market. The market leader, DaVita (DVA), has even attracted attention and investment from Warren Buffet’s team at Berkshire.

Buffett, renownedto have a soft spot for sugar, makes a strange bedfellow for the company considering his other top investments in CocoCola (KO) and Kraft Foods (KFT) contribute  to obesity and help lead people to the dialysis clinic.  On the other hand, one could make the argument that Berkshire is once again being sneakily brilliant in playing both sides of the health card.

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While this synergy is hardly new news, it’s worth reminding of the trend, and showing that the big names are not slow on jumping on the bandwagon. Is this obesity hedge something we should all be considering?

Use this chart comparing the performance of DVA against the S&P500 index

Below is a more information on companies that Buffet company, Berkshire Hathaway, has a significant stake in.

 

1. DaVita, Inc. (DVA, Earnings, Analysts, Financials): Provides kidney dialysis services in the United States. Market cap at $8.28B, most recent closing price at $88.11.

 

 

2. The Coca-Cola Company (KO, Earnings, Analysts, Financials): Distributes, and markets nonalcoholic beverages worldwide. Market cap at $170.87B, most recent closing price at $75.74.

 

 

3. Kraft Foods Inc. (KFT, Earnings, Analysts, Financials): Together with its subsidiaries, manufactures and markets packaged food products worldwide. Market cap at $68.65B, most recent closing price at $38.72.

 

 

Written by Dan Connelly

 

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