Filings Show Berkshire Bought HCA Shares
Berkshire Hathaway Inc., billionaire Warren E. Buffett’s investment company, in June bought 10 million shares of hospital company HCA Inc. worth $317 million, state regulatory filings show.
The shares were purchased by Berkshire’s Geico Corp. auto insurance unit, according to state regulators that oversee the insurer. Berkshire didn’t list the stock on its June 30 filing with the Securities and Exchange Commission.
Shares of Nashville-based HCA, the largest U.S. hospital chain, fell by more than a third in the year before the purchase by Buffett, whose controlling stake in Berkshire makes him the world’s second-richest man. Buffett is known for investing in undervalued companies.
A Standard & Poor’s index of health-care facilities stocks has fallen 8.3% this year, while the broad market has risen. HCA is down 12% year to date.
Hospital stocks have been hurt by Santa Barbara-based Tenet Healthcare Corp.’s woes. Tenet is closing 14 of its 114 hospitals amid a U.S. inquiry into its Medicare billing practices.
HCA’s second-quarter profit dropped 31% as it admitted fewer patients than it expected this year.
News of Buffett’s stake helped pushed HCA shares up 78 cents to $36.70 on the New York Stock Exchange on Monday.
Berkshire didn’t list the holding in its June 30 filing with the SEC, a signal that Buffett probably continues to receive SEC waivers to keep some purchases secret. But the SEC has denied other such requests by Buffett.
Buffett has contended that Berkshire needs exemptions because investors imitate his trades, making it difficult to change his holdings over a long period of time.
From Bloomberg News
