Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.A)(BRK.B) and top stock picker, has several stocks in his portfolio that have produced solid growth historically. Though Buffett prefers stability to rapid growth, his new portfolio managers, Ted Weschler and Todd Combs, have purchased stock in several more companies characterized by high growth.
The fastest-growing Buffett, Weschler and Combs picks are: DirecTV (DTV, Financial), DaVita Inc. (DVA, Financial), CVS Caremark Corp (CVS, Financial) and General Dynamics (GD, Financial).
DirecTV (DTV)
Berkshire’s portfolio contains 22,999,600 shares of DirecTV, which was added from the third quarter of 2011 to the first quarter of 2012.
DirecTV has a 10-year EBITDA growth rate of 33.4%. EBITDA grew from $668 million in 2002 to $7 billion in 2011. Analysts expect the company to have 6.7% EBITDA growth in 2012, the highest in the industry.
The company has had steady U.S. growth in a more mature Pay-TV market, and also has a major growth opportunity in the pay-TV market in Latin America, where pay-TV penetration is still low. Revenue growth in Latin America in 2011 was 42% on record subscriber growth compared to 2010. DirecTV U.S. revenue grew just 8%.
DaVita Inc. (DVA)
Berkshire’s portfolio contains 6 million shares of DaVita Inc. (DVA), which it accumulated in the fourth quarter of 2011 and the first quarter of 2012.
DVA has a 10-year EBITDA growth rate of 18.8%; EBITDA grew from $384 million in 2002 to $1.4 billion in 2011.
Last year, DaVita grew in several key ways: It provided 19.6 million dialysis treatments, a 9.1% increase from 2010. Non-acquired growth for the year was 4.6%. It also acquired DSI Renal Inc. and 57 other dialysis centers in the U.S., building its clients served to 142,000 patients, or about 1 in 3 dialysis patients in the U.S.
DaVita Rx, the world’s largest full-service pharmacy dedicated to kidney-related needs, filled its 5 millionth prescription since it began delivering medications in 2005. The business now provides medication to over 41,000 patients.
It also expanded beyond the U.S. in 2011 and by 2011, operated 11 clinics through subsidiaries, joint ventures or expanded agreements in Germany, India and Singapore. Expansion will continue in 2012 with its recently signed agreements with local partners to provide dialysis services in China and Saudi Arabia.
CVS Caremark Corp (CVS)
Berkshire’s portfolio contains 7,106,500 shares of CVS Caremark Corp. (CVS), which is also a newer holding. They acquired it in the third and fourth quarters of 2011.
CVS has a 10-year EBITDA Growth rate of 15.7%. EBITDA in 2002 for CVS was $717 million and in 2002 was $3.5 billion. CVS serves about 5 million customers per day at over 7,300 stores and has roughly 20% of the U.S. pharmacy market share – up from 13.6% in 2004.
The company’s focus is to drive growth both in the front of its stores and in its pharmacies. Its plan for doing this includes, for front store growth, providing unique customer insights with ExtraCare, enhancing its digital capabilities, clustering its stores, and differentiated store brands. In its pharmacy, it will provide superior customer service, increased access, patient care improvements, and capitalize on its integration “sweet spots.”
General Dynamics (GD)
Berkshire’s portfolio contains 3,877,122 shares of General Dynamics (GD), which it acquired in the third and fourth quarters of 2011.
GD has a 10-year EBITDA growth rate of 13%. EBITDA grew from $1.8 billion in 2002 to $4.4 billion in 2011.
GD had a decade of growth, but faces headwinds in upcoming years from declines in defense spending. If Congress does not act, sequestration could impose $500 billion in additional defense budget cuts over the next nine years. For fiscal year 2013, the President has requested Defense Department base-budget funding of $525 billion, including $168 billion for investment accounts, which caused funding to its U.S. vehicle programs to decline.
In response, the company has in the past several years cut overhead costs, improved manufacturing processes, divested certain non-core assets and cut staff.
Buffett’s next fastest-growing stocks are Intel Corporation (INTC, Financial), IBM Corp. (IBM, Financial) and Walmart Stores Inc. (WMT, Financial).
See Warren Buffett’s stock portfolio of Berkshire Hathaway here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Warren Buffett.
The fastest-growing Buffett, Weschler and Combs picks are: DirecTV (DTV, Financial), DaVita Inc. (DVA, Financial), CVS Caremark Corp (CVS, Financial) and General Dynamics (GD, Financial).
DirecTV (DTV)
Berkshire’s portfolio contains 22,999,600 shares of DirecTV, which was added from the third quarter of 2011 to the first quarter of 2012.
DirecTV has a 10-year EBITDA growth rate of 33.4%. EBITDA grew from $668 million in 2002 to $7 billion in 2011. Analysts expect the company to have 6.7% EBITDA growth in 2012, the highest in the industry.
The company has had steady U.S. growth in a more mature Pay-TV market, and also has a major growth opportunity in the pay-TV market in Latin America, where pay-TV penetration is still low. Revenue growth in Latin America in 2011 was 42% on record subscriber growth compared to 2010. DirecTV U.S. revenue grew just 8%.
DaVita Inc. (DVA)
Berkshire’s portfolio contains 6 million shares of DaVita Inc. (DVA), which it accumulated in the fourth quarter of 2011 and the first quarter of 2012.
DVA has a 10-year EBITDA growth rate of 18.8%; EBITDA grew from $384 million in 2002 to $1.4 billion in 2011.
Last year, DaVita grew in several key ways: It provided 19.6 million dialysis treatments, a 9.1% increase from 2010. Non-acquired growth for the year was 4.6%. It also acquired DSI Renal Inc. and 57 other dialysis centers in the U.S., building its clients served to 142,000 patients, or about 1 in 3 dialysis patients in the U.S.
DaVita Rx, the world’s largest full-service pharmacy dedicated to kidney-related needs, filled its 5 millionth prescription since it began delivering medications in 2005. The business now provides medication to over 41,000 patients.
It also expanded beyond the U.S. in 2011 and by 2011, operated 11 clinics through subsidiaries, joint ventures or expanded agreements in Germany, India and Singapore. Expansion will continue in 2012 with its recently signed agreements with local partners to provide dialysis services in China and Saudi Arabia.
CVS Caremark Corp (CVS)
Berkshire’s portfolio contains 7,106,500 shares of CVS Caremark Corp. (CVS), which is also a newer holding. They acquired it in the third and fourth quarters of 2011.
CVS has a 10-year EBITDA Growth rate of 15.7%. EBITDA in 2002 for CVS was $717 million and in 2002 was $3.5 billion. CVS serves about 5 million customers per day at over 7,300 stores and has roughly 20% of the U.S. pharmacy market share – up from 13.6% in 2004.
The company’s focus is to drive growth both in the front of its stores and in its pharmacies. Its plan for doing this includes, for front store growth, providing unique customer insights with ExtraCare, enhancing its digital capabilities, clustering its stores, and differentiated store brands. In its pharmacy, it will provide superior customer service, increased access, patient care improvements, and capitalize on its integration “sweet spots.”
General Dynamics (GD)
Berkshire’s portfolio contains 3,877,122 shares of General Dynamics (GD), which it acquired in the third and fourth quarters of 2011.
GD has a 10-year EBITDA growth rate of 13%. EBITDA grew from $1.8 billion in 2002 to $4.4 billion in 2011.
GD had a decade of growth, but faces headwinds in upcoming years from declines in defense spending. If Congress does not act, sequestration could impose $500 billion in additional defense budget cuts over the next nine years. For fiscal year 2013, the President has requested Defense Department base-budget funding of $525 billion, including $168 billion for investment accounts, which caused funding to its U.S. vehicle programs to decline.
In response, the company has in the past several years cut overhead costs, improved manufacturing processes, divested certain non-core assets and cut staff.
Buffett’s next fastest-growing stocks are Intel Corporation (INTC, Financial), IBM Corp. (IBM, Financial) and Walmart Stores Inc. (WMT, Financial).
See Warren Buffett’s stock portfolio of Berkshire Hathaway here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Warren Buffett.
