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Is Buffett Abandoning Health-Care Stocks?

By Dave Williamson – Feb 22, 2014 at 1:05PM

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Could Warren Buffett be exiting his positions in the health care sector?

Warren Buffett's Berkshire Hathaway (BRK.B 1.10%) just disclosed in a fourth-quarter filing that it has liquidated its position in big pharma stock GlaxoSmithKline (GSK 0.67%). Does that mean Buffett is abandoning the health-care industry? Should investors follow the Oracle of Omaha's lead and dump their pharma and biotech holdings?

In one word: No!

Taking a closer look at the 13F filing reveals Berkshire has not abandoned the industry. It still has a $30 million position in Johnson & Johnson, and $210 million stake in Sanofi, and is the largest single shareholder of DaVita. Buffett aggressively accumulated shares in the dialysis service provider last year, which are currently valued at $2.3 billion.

In this segment of The Motley Fool's health care-focused investing show Market Checkup, analyst David Williamson discusses what Buffett's decision to dump Glaxo means, dives in to the remaining health care holdings in Berkshire's portfolio, and highlights different strategies investors can take to profit from Warren Buffett's investing acumen.

David Williamson owns shares of Berkshire Hathaway. The Motley Fool recommends and owns shares of Berkshire Hathaway. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Sanofi Stock Quote
Sanofi
SNY
$45.35 (-1.13%) $0.52
Berkshire Hathaway Stock Quote
Berkshire Hathaway
BRK.B
$318.60 (1.10%) $3.47
GSK plc Stock Quote
GSK plc
GSK
$34.59 (0.67%) $0.23
DaVita Stock Quote
DaVita
DVA
$73.73 (2.90%) $2.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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