Bulls and bears for a given stock are often depicted as pitted directly against one another, but oftentimes bulls and bears agree on most parts of a stock. It can be that the interpretation on one or two key details changes the whole outlook for a stock. We discuss DaVita Healthcare for a third time, this time with Ethan Watkins, who is betting against the stock. We hit on themes shared with our discussion with last week's bull, Michael Knipp, but Watkins brings his own research to bear, making for an interesting new conclusion.
Topics covered:
2:45 minute mark - Starting with Chanos, the army, and the state of healthcare, and what is frustrating about DaVita 6:30 - What is the game around dialysis payments, and the role of the unions 13:30 - How does this compare to what was before, and what can we do fix the industry? 17:30 - Moving from the policy view to an investing thesis 21:30 - Earnings decline or balance sheet risk? Why not both? 25:00 - Drilling into the 'medicare put' story and the hot potato problem 31:30 - Searching for a catalyst - the potential of a DMG deal break 48:00 - How it feels going against Buffett? 50:00 - What about Davita's moat