Author Topic: DVA DaVita HealthCare Partners  (Read 215860 times)

koshigoe

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Re: DVA DaVita HealthCare Partners
« Reply #230 on: September 22, 2017, 11:30:27 AM »
unfortunately they are entering the share repurchase blackout period (5 weeks before Nov earnings). hopefully today they're buying!


Spekulatius

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Re: DVA DaVita HealthCare Partners
« Reply #231 on: September 22, 2017, 11:44:40 AM »
I can't understand why someone would spend time attacking a service that loses money on nearly 80% of their business (someone correct me if I'm wrong on this figure.)

Seems like they'd be going after egregious margins elsewhere?

Agree with Flesh tho (buy, buy, buy backs!)

Comparisons with VRX are misguided - DVA does not sell pills that cost $5 to make and are quasi generic for $500. the margins in this busines are much lower than with Pharma. Dialysis is a tough business where it is important to keep cost low and utilization high while at the same time delivering quality work. I think there is an issue with the business model where a relatively small percentage of their patient generate all the prints, but this is by no means that same story than VRX.
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sleepydragon

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Re: DVA DaVita HealthCare Partners
« Reply #232 on: September 22, 2017, 11:51:27 AM »
unfortunately they are entering the share repurchase blackout period (5 weeks before Nov earnings). hopefully today they're buying!

Likely not a coincident this report is published at this time.

DooDiligence

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Re: DVA – DaVita HealthCare Partners
« Reply #233 on: September 22, 2017, 12:15:21 PM »
unfortunately they are entering the share repurchase blackout period (5 weeks before Nov earnings). hopefully today they're buying!

Likely not a coincident this report is published at this time.

No blackout for COBF members.

I hope it gets shorted down another 20% (I know, careful what you wish 4)
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oddballstocks

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Re: DVA DaVita HealthCare Partners
« Reply #234 on: September 22, 2017, 12:34:13 PM »
I have no dog in this fight.  But the responses here are interesting.  I read the report, have no opinion.

BUT since WEB owns this it's 'good'.  What if WEB sells out, will the psychology change and suddenly the allegations are true, or it becomes 'bad'?

The same thing happened with ZINC.  Everyone was rah-rah ZINC when Pabrai loved it.  Then he dumped the stock, and the stock tanked and suddenly it's terrible.  Yet nothing changed in the meantime, just the perception.

I don't know if half of your profit coming from 4% is good or bad, but I do know it's risky.  Maybe this is a larger comment about following guru's whomever they are.  Their halo can cloud your thinking.
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sleepydragon

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Re: DVA DaVita HealthCare Partners
« Reply #235 on: September 22, 2017, 01:00:30 PM »
I have no dog in this fight.  But the responses here are interesting.  I read the report, have no opinion.

BUT since WEB owns this it's 'good'.  What if WEB sells out, will the psychology change and suddenly the allegations are true, or it becomes 'bad'?

The same thing happened with ZINC.  Everyone was rah-rah ZINC when Pabrai loved it.  Then he dumped the stock, and the stock tanked and suddenly it's terrible.  Yet nothing changed in the meantime, just the perception.

I don't know if half of your profit coming from 4% is good or bad, but I do know it's risky.  Maybe this is a larger comment about following guru's whomever they are.  Their halo can cloud your thinking.

Well, Pabrai is not Web. I would follow Web but not Pabrai. But it's not even a Web position.
If most revenue are from 4% clients, then that's risky. Here the situation is special: the 96% client (gov) getting the service at negative cost and the 4% subsidies the 96% client. The 4% doesnt have to use dva, but other alternatives, including set up their own shops at CVS, would cost more. 

rb

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Re: DVA DaVita HealthCare Partners
« Reply #236 on: September 22, 2017, 02:37:48 PM »
I have no dog in this fight.  But the responses here are interesting.  I read the report, have no opinion.

BUT since WEB owns this it's 'good'.  What if WEB sells out, will the psychology change and suddenly the allegations are true, or it becomes 'bad'?

The same thing happened with ZINC.  Everyone was rah-rah ZINC when Pabrai loved it.  Then he dumped the stock, and the stock tanked and suddenly it's terrible.  Yet nothing changed in the meantime, just the perception.

I don't know if half of your profit coming from 4% is good or bad, but I do know it's risky.  Maybe this is a larger comment about following guru's whomever they are.  Their halo can cloud your thinking.

Well, Pabrai is not Web. I would follow Web but not Pabrai. But it's not even a Web position.
If most revenue are from 4% clients, then that's risky. Here the situation is special: the 96% client (gov) getting the service at negative cost and the 4% subsidies the 96% client. The 4% doesnt have to use dva, but other alternatives, including set up their own shops at CVS, would cost more.
Ok, just did a quick calculation. The cost per treatment for DVA is about $271. 88% of their patients are gov. This implies that they charge the commercial side an average of $1,097 per treatment or about 4x cost. You can see why the insurance cos may be a little pissed off.

I agree with oddball, this reliance on charging a lot per treatment on the commercial side is a great risk. Add in DVAs leverage and it gets even less appealing.

Btw, if they were to get some pushback from insurance to lower their rates to 3x cost that would lower their operating profit by $815 million. This is not an out of this world scenario. 3x cost is not a low price.

Rasputin

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Re: DVA DaVita HealthCare Partners
« Reply #237 on: September 22, 2017, 03:16:23 PM »
Insurance companies shouldn't be pissed about it since they only have to pay the 4x for 33 months. This 33 month period is unique only for ESRD.

rb

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Re: DVA DaVita HealthCare Partners
« Reply #238 on: September 22, 2017, 03:18:15 PM »
Try explaining that to an insurance co.

Spekulatius

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Re: DVA – DaVita HealthCare Partners
« Reply #239 on: September 22, 2017, 03:29:50 PM »
I have no dog in this fight.  But the responses here are interesting.  I read the report, have no opinion.

BUT since WEB owns this it's 'good'.  What if WEB sells out, will the psychology change and suddenly the allegations are true, or it becomes 'bad'?

The same thing happened with ZINC.  Everyone was rah-rah ZINC when Pabrai loved it.  Then he dumped the stock, and the stock tanked and suddenly it's terrible.  Yet nothing changed in the meantime, just the perception.

I don't know if half of your profit coming from 4% is good or bad, but I do know it's risky.  Maybe this is a larger comment about following guru's whomever they are.  Their halo can cloud your thinking.

I can’t speak for others, but I don’t own my (small) position because of WEB. I own this knowing because the stock is cheap and I believe they do have a narrow moat, due to being the low cost competitor and have a hug market share, together with Fresenius. I also own this because I have some ground level exposure through family (which I don’t want to evaluate further) and it does not feel like a fraudulent operation, it feels like a very lean operation. so, I think the statement from the article above, that their connection to AKF is their only competitive advantage is incorrect.

Now, I acknowledge the risk from somewhat broken revenue model, where some customers pay 4x what others do, for the same service, but again discrepancies in pricing are allover the healthcare system, albeit at probably a smaller extent.

Also, hurting these cost providers of a very essential service does not really help reduce the overall cost in the healthcare system. If Fresenius and DVA get into trouble and need to close down centers, those patients would need to go a a hospital, where costs are many times higher, due to much higher overhead.

I would not own a large position in DVA,  because I really cannot estimat the risk that something will change in the pricing that could drastically reduce DVA’s profits, but oeverall, it seem that the stocks valuation reflect this risk and makes it a fair bet at current prices.
« Last Edit: September 22, 2017, 08:31:12 PM by Spekulatius »
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