Top stock pitches (Fri, Jul 5)

Xometry (XMTR), trading at $11.9 per share with a market cap of $582 million, is the market leader in digitizing custom manufacturing through its online platform. The company offers instant quotes for a wide range of services including CNC machining, injection molding, 3D printing, sheet metal, and fabrication, connecting customers to a global network of suppliers. Xometry aims to be a one-stop shop for non-contract manufacturing, potentially replacing multiple suppliers and reducing costs for customers. While not yet cash flow positive, the company is showing operating leverage and has sufficient liquidity. Management is focused on balancing growth and profitability as they target a massive total addressable market. Xometry's stock price has significantly decreased since its 2021 IPO, but its market-leading position and potential to streamline the highly analog manufacturing industry present an attractive investment opportunity.

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Orthofix Medical Inc. (OFIX) is an undervalued spine and orthopedics company trading at 0.7x 2026E revenue, with a potential $33 price target (1.5x 2026E rev). The company's recent management shakeup, including a new CEO and CFO with successful turnaround experience, presents an opportunity for operational improvement. OFIX's portfolio includes valuable assets such as the Bone Growth Therapies business (40% market share, 40%+ margins) and a lucrative biologics partnership with MTF. Catalysts include margin expansion, positive free cash flow generation, an upcoming investor day, debt refinancing, and potential asset sales or a company sale. The new management team aims to rightsize costs, restructure the spine implants business, grow neglected segments, and improve cash flow. Risks include execution challenges and potential sales disruption following the CEO transition. With a refreshed board and new leadership, OFIX is positioned for a turnaround, targeting long-term EBITDA margins of 15% at $1 billion in revenue, likely by 2027.

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JBG SMITH Properties (JBGS) presents a compelling investment opportunity, trading at a significant discount to its net asset value (NAV). The company has conducted approximately $50 million in share buybacks during Q2, as evidenced by a reduction in basic shares since April. Combined with its dividend, JBGS offers a mid-teens distribution yield at the current share price. The company's multifamily segment is poised to generate ~$180 million in NOI, which, at a 5.5% cap rate, implies a $3.3 billion value against a total enterprise value of $3.9 billion. After accounting for debt, the implied multifamily equity of $1.2 billion is significantly below the current market cap of $1.55 billion. Additionally, JBGS's office assets are conservatively valued at around $1 billion, with a 9 million square foot development pipeline. This valuation disparity, coupled with aggressive share repurchases and a high yield, presents an attractive opportunity for investors seeking exposure to a diversified real estate portfolio at a substantial discount to intrinsic value.

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