Buffett Watch

A stock pick from Warren Buffett's stock picker

Health-care investing tips from Buffett's team

Warren Buffett isn't the only person at Berkshire Hathaway making decisions on stocks to buy and sell. In the last few years, he's brought on two portfolio managers, Todd Combs and Ted Weschler.

Along with Tracy Britt Cool, his financial assistant, they are what he calls his "three Ts." They generally keep a very low profile.

But Monday, for the first time ever, they joined their boss for a live appearance on CNBC's "Squawk Box."

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Weschler, hired in late 2011 after paying a total of $5.3 million in charity auctions for two meals with Buffett, has been accumulating shares of dialysis company DeVita HealthCare Partners since he came aboard.

In its most recent SEC filing on the stock, Berkshire said it owned 37.6 million shares, about 17.7 percent of DeVita's shares outstanding. That stake has a market value of $2.58 billion at its current market price.

Team Buffett: Todd Combs (L), Ted Weschler (C) and Tracy Britt Cool (R).
Lacy O'Toole | CNBC

During the live interview, Weschler explained why he likes the stock:

"The broad filters that I apply for health-care investing in general is, No. 1: Does the health-care company deliver better quality of care than someone could get somewhere else? And DeVita falls into that.

"No. 2: Does it deliver a net savings to the health-care system? In other words, is the total bill for U.S. health-care cheaper because of the efficiency the company provides? DeVita checks that box.

"And lastly: do you get a higher return on capital, predictable growth and shareholder-friendly management? Absolutely ...

"You've got health care is 17, 18 percent of GDP...

"I'm not sure what the stock will do over the next year or the next two years. But very comfortable that five years from now it will be a more valuable franchise."

By CNBC's Alex Crippen. Follow him on Twitter: @alexcrippen

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