DaVita enters its June 4 earnings report with a sharply divided ownership story: Berkshire Hathaway trimmed its stake in May, CFO Joel Ackerman sold nearly $10 million in stock, and yet the shares are still up 30% over the past month alone.
The insider selling is the sharpest signal heading into the print. The CFO sold 51,471 shares on May 7 for roughly $9.9 million, days after a first-quarter result that sent the stock up more than 25% in a single session. The Chief Compliance Officer followed with three separate sales in mid-May. Most striking is Berkshire, which trimmed its position by around 1.22 million shares on May 1 — its first disclosed reduction in recent quarters — taking its stake to roughly 45% of shares outstanding. Net insider activity over the past 90 days reflects a net sell of approximately 1.4 million shares worth over $216 million. That is not unusual post-surge behaviour, but the combination of CFO, COO-level, and Berkshire selling into strength creates a notable overhang heading into the second-quarter numbers.
Short interest, by contrast, tells a less alarming story. Bears have been retreating: at 8.1% of the free float as of May 28, short interest has fallen about 8% over the past month and dropped nearly 7% in the past week alone. Borrow conditions are relaxed — availability is running at 381%, with the cost to borrow barely above 0.37%, both well below any squeeze territory. That easing is consistent with shorts covering into a stock that rallied 30% in a month; it does not point to fresh conviction either way. Options sentiment is similarly muted. The put/call ratio at 0.78 sits only marginally above its 20-day average of 0.74, a z-score of just 0.45 — nowhere near the defensive hedging levels that preceded the Q1 print.
The analytical community has been busy recalibrating since Q1. Several firms lifted targets materially — UBS moved to $235, Deutsche Bank upgraded from Hold to Buy with a $220 target, and Barclays raised to $194. All of those moves came in early May, meaning targets are now broadly clustered around current levels near $194. The bull case centres on DaVita's structural dominance — 35% US clinic market share, roughly 280,000 patients, and an EPS forward estimate trajectory that has been revised higher aggressively (EPS momentum ranks in the 85th percentile on a 30-day basis). The bear case is unchanged: Medicare reimbursement represents about two-thirds of US revenue, and any rate pressure or payer-mix deterioration — specifically a shift away from the commercial patients who generate disproportionate profits despite being just 10% of volumes — quickly erodes the margin profile that underpins the Q1 optimism. The mean analyst target at roughly $194 leaves almost no consensus upside from the current close.
History adds context without softening the stakes. The Q1 print produced a 26% one-day move and a 30% five-day move — an extraordinary reaction that compressed a year's worth of re-rating into days. The June 4 report will test whether that was a one-off catch-up driven by a specific positive surprise, or the start of a durable earnings upgrade cycle that the Berkshire and CFO selling clearly does not yet endorse.
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