In Episode 49 of “Market News with Rodney Lake,” Professor Lake, Director of the GW Investment Institute, explores Xylem, a water technology company that serves individual consumption and critical infrastructure like data centers. The company maintains stable gross margins around 37.5% and has steadily grown its net income and free cash flow, reaching a 12% net margin and $889 million in trailing twelve-month free cash flow. Lake notes that while new CEO Matthew Pine is an industry veteran, his short tenure makes it difficult to evaluate management, especially following Xylem’s transformative $7.5 billion acquisition of Évoqué in 2023. With modest projected revenue growth and a high valuation multiple of 28x earnings, concerns remain about future performance. As a strategic position in the water industry, Xylem remains a portfolio holding but warrants close observation moving forward.

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Note: This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.

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In Episode 48 of “Market News with Rodney Lake,” Professor Lake, Director of the GW Investment Institute, discusses Emerson Electric as the company is critical in supporting infrastructure behind AI technology. With a market cap of $67 billion and annual revenue of approximately $17.6 billion, Emerson Electric has delivered moderate growth alongside a notable increase in gross margins, from 44% to 52% in recent years. Lake remarks that the net income and free cash flow have trended upward, supported by a strategic move into the higher-margin software business by acquiring Aspen Technology. However, the company’s balance sheet has weakened due to increased debt from the acquisition. Professor Lake advises analysts to pay close attention to how management executes this transition into digital solutions and controls the debt on their balance sheet.

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In Episode 47 of “Market News with Rodney Lake,” Professor Lake, Director of the GW Investment Institute, focuses on Starbucks’ business model, financial health, and prospects. While the brand remains strong and globally recognized, especially in North America and China, key financial indicators suggest weaker performance: revenue growth has slowed from 23% in 2021 to negative in 2025, gross margins have declined from 29% to 25%, and net margins have declined from 13% to 9%. Professor Lake explains that modest free cash flow and net debt of $23 billion limit Starbucks’ flexibility. The company also offers a growing dividend, but high valuation and a weakening balance sheet minimize optimism. One upside is new CEO Brian Niccol, who successfully led a turnaround at Chipotle and may revitalize Starbucks’ customer experience and brand.

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