Moon Capital Management Exited DaVita (DVA) with 174% total Return

2 months ago 27

Soumya Eswaran

Thu, July 23, 2026 astatine 9:33 AM CDT 3 min read

Moon Capital Management, LLC, an concern absorption company, released its 2nd 4th 2025 capitalist letter. A transcript of the missive tin beryllium downloaded here. The S&P 500 scale rebounded successful the 2nd quarter, achieving a 9.6% instrumentality for the archetypal fractional of the year, portion Moon Capital Management's equity portfolio gained 4%. AI-related stocks led marketplace performance, mitigating geopolitical concerns. Moon Capital holds 10% of its portfolio successful technology, importantly little than the S&P 500's 39%. The steadfast remains cautious astir ample AI investments and their imaginable instrumentality connected investment. In addition, delight cheque the Strategy's apical 5 holdings to cognize its champion picks successful 2026.

In its Q2 2026 capitalist letter, Moon Capital Management highlighted DaVita Inc. (NYSE:DVA). DaVita Inc. (NYSE:DVA) is simply a US-based healthcare institution that offers kidney dialysis services for patients suffering from chronic kidney failure. On July 22, 2026, DaVita Inc. (NYSE:DVA) closed astatine $232.08 per share, reflecting a marketplace capitalization of $14.89 billion. DaVita Inc. (NYSE:DVA) posted a one-month instrumentality of 8.77%, portion its shares gained 60.31% implicit the past 52 weeks.

Moon Capital Management stated the pursuing regarding DaVita Inc. (NYSE:DVA) successful its Q2 2026 capitalist update:

"During the 2nd quarter, we exited our presumption successful the kidney dialysis services institution DaVita Inc. (NYSE:DVA). While DaVita remains an exceptional relation with a well-established competitory advantage, we concluded that the aboriginal accidental had go little charismatic pursuing the important appreciation successful the stock. Over our 3.5-year holding period, we generated a full instrumentality of astir 174%, oregon astir 35% annualized.

We primitively purchased shares astatine astir $72 per stock pursuing a selloff triggered by the company's simplification successful its 2023 guidance. At the time, the marketplace was focused chiefly connected near-term measurement concerns, portion we believed investors were underestimating the durability of DaVita's currency generation. Based connected the company's EBITDA outlook, we estimated escaped currency travel would transcend $1 cardinal annually, allowing america to acquisition the concern for little than 7x escaped currency flow, astir fractional of its humanities valuation.

A cardinal portion of our thesis revolved astir DaVita's quality to usage its depressed valuation to make important per-share worth done stock repurchases. Although buybacks were temporarily paused portion the institution prioritized indebtedness reduction, we believed they would yet resume..." (Click present to work the afloat text)

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