2. DaVita HealthCare Partners Inc. (DVA)

10-Year EBITDA Growth Rate:  17.20%

Warren Buffett's Portfolio Weighting at of 12-31-2013:  2.2%

Value of Holdings:  $2.31 billion

DaVita HealthCare Partners. (DVA) provides dialysis services in the United States for patients suffering from kidney disease. As of December 31, 2011 the company provided dialysis services to 1,809 outpatient dialysis centers across 43 states and the district of Colombia helping approximately 142,000 patients. The company's dialysis and laboratory services business account for 93% of its consolidated revenues.

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TheStreet Ratings team rates DAVITA HEALTHCARE PARTNERS as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate DAVITA HEALTHCARE PARTNERS (DVA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year, growth in earnings per share, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 23.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • DAVITA HEALTHCARE PARTNERS has improved earnings per share by 31.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DAVITA HEALTHCARE PARTNERS increased its bottom line by earning $2.90 versus $2.73 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $2.90).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 36.2% when compared to the same quarter one year prior, rising from $155.84 million to $212.28 million.
  • Net operating cash flow has significantly increased by 76.88% to $354.19 million when compared to the same quarter last year. In addition, DAVITA HEALTHCARE PARTNERS has also vastly surpassed the industry average cash flow growth rate of -26.50%.
  • You can view the full analysis from the report here: DVA Ratings Report

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