Healthcare provider stocks are declining due to higher expenses and patient subsidy debates. Hedge funds are selling aggressively, with short positions outnumbering long ones by 8:1. DaVita’s short interest is at 11.6%, making it one of the most shorted S&P 500 stocks, signaling a concerning trend for investors.

Despite being a Warren Buffett favorite, DaVita’s shares are near one-year lows. The company specializes in kidney care services, offering various dialysis treatments and renal care options. Recent leadership changes and research on advanced treatments have not boosted the stock, which has dropped 36% in the past year.

Hedge funds have increased bearish bets on DaVita due to disappointing third-quarter results and concerns about soft treatment volumes. The company’s guidance remains strong, with a target of $10.35 to $11.15 adjusted EPS for 2025. Warren Buffett’s selling of DaVita shares has added to negative sentiment, with Wall Street analysts mostly rating the stock as a “Hold.”

While DaVita’s balance sheet remains healthy, rising costs and short-selling pressure pose challenges. Analysts have mixed views on the stock, with some forecasting a potential upside of 34%. Investors are advised to exercise caution, consider selling part of their position, and wait for clearer trends before buying more shares.

Read more at Yahoo Finance: Hedge Funds Are Shorting This Classic Warren Buffett Stock. Should You Sell Shares Now?