1 Main Capital more than doubled its investment in Limbach Holdings, Inc. (NASDAQ: LMB) in the third quarter of 2026, betting that the building systems contractor's strategic pivot to higher-margin work justifies buying shares at a 75 percent discount to their 2025 highs.
Limbach designs, installs and maintains HVAC, electrical, plumbing and control systems. Over the past few years, management shifted the company away from low-margin general contractor work toward owner-direct relationships. That focus lifted EBITDA margins from low single digits to low double digits.
The strategy has a clear cost: Limbach largely avoided the data center construction boom. Competitors now generate one-third to two-thirds of profits from data center projects. Limbach did not participate.
The boutique firm's Q3 2026 return was minus 9.1 percent, versus plus 2.3 percent for the S&P 500 and minus 7.2 percent for the Russell 2000. Consumer discretionary holdings, a core focus for 1 Main, weighed on performance. Limited exposure to energy and technology—which fueled the broader market—also hurt.
The fund manager cited low valuations, strong cash generation and long-term growth potential in its largest positions: Basic-Fit, Hilton Grand Vacations, IWG, KKR and Limbach. The firm also initiated a position in WildBrain.
1 Main flagged risks from elevated oil prices, rising interest rates and uncertainty around artificial intelligence spending, emphasizing disciplined capital allocation in response.
Limbach closed November 3, 2026 at $49.92 per share, a market capitalization of $595.30 million. The stock gained 12.32 percent over the past month but remained down 31.85 percent over 52 weeks.
