Limbach: 6x EBITDA, Huge Discount vs. Peers – 64% Near-Term Upside

Limbach: 6x EBITDA, Huge Discount vs. Peers - 64% Near-Term Upside by Eric Gomberg, Dane Capital

• Direction: Long
• Timeframe: 1 - 12 months
• Expected Gain: 91%

Dane Capital Management, LLC

Summary

Limbach, a company with a 115-year operating history, trades at 6x EV/EBITDA, a 3+ EBITDA turns discount to its sector. Peer multiples imply a share price of $15, 64% upside.

The company expects revenue and EBITDA to grow 20%+ and 30%+, respectively, in 2016, and has excellent visibility for substantial growth in 2017. It also has double-digit FCF yield.

Accretive bolt-on M&A at 3-5x EBITDA and new service offerings, in MEP, can further accelerate growth. Near-term catalysts should drive shares higher.

We recognize reasons for the mispricing: micro-cap, public via SPAC, no coverage, bulletin board. There's a logical reason they...