Welcome to the Q2 2026 issue of Hidden Value Stocks from Hedge Fund Alpha (formerly ValueWalk Premium).
This edition features Yaron Naymark of 1 Main Capital.
Namark selected Limbach Holdings (NASDAQ:LMB) and MasterCraft Boat (NASDAQ:MCFT), seeing three-year target prices of $200 and $72, respectively, for the two names.
See excerpts from the interview below.
Meet Yaron Naymark of 1 Main Capital
Yaron Naymark founded 1 Main Capital in early 2018 and serves as chief investment officer of the firm. The firm is a concentrated, long-biased, value-oriented public equity investment partnership.
Before founding 1 Main, Naymark served in various roles over a decade, starting at Citi in the summer of 2008 – just as Lehman Brothers was collapsing. “My experience there taught me to be allergic to leverage and to always invest from a position of offense,” Naymark told Hedge Fund Alpha. “From there I moved to private equity, where I learned to conduct fundamental diligence skills and how businesses work and make decisions. I then worked at two public equity hedge funds before ultimately starting 1 Main.”
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Q: Please tell us briefly about your stock pick.
A: LMB is a leading building systems solution firm that partners with owners of mission-critical infrastructure to offer design, engineering, maintenance, and repair services. The company specializes in mechanical, electrical, and plumbing systems for customers in six core verticals: health care, industrial/ manufacturing, data centers, life sciences, higher education, and entertainment.
Since coming public in 2016, LMB has transitioned from bidding almost entirely through general contractors (GCR) to owner-direct relationships (ODR). For 2026, the company is expecting that 75-80% of revenue will come from ODR. ODR projects are smaller, higher margin, less capital intensive, and less cyclical than GCR work.
Additionally, LMB has no net debt and is highly cash generative with a robust acquisition pipeline. It has proven that it can acquire GCR-heavy businesses at just 5x EBITDA and transition them to ODR. This “buy and transform” strategy further reduces its entry multiple and represents an exceptional use of FCF.
Between organic ODR growth and accretive acquisitions, I believe LMB can grow FCF per share at approximately a 20% CAGR over the medium term without the need for financial leverage. As the company grows, diversifies its geographic footprint, and becomes better understood by the broader market, I expect the stock will follow.
Q: What initially drew your attention to this stock?
A: I first got involved with Limbach during the pandemic, when the stock was pricing in a real possibility of bankruptcy that I thought was overblown. That worked out well, but I eventually sold after losing confidence in the management team’s capital allocation decisions. A couple of years later, the COO was elevated to CEO — someone I viewed as much better suited to push the ODR transition and execute on the M&A strategy. The business had already improved meaningfully, but the stock hadn’t caught up. That gap was the opportunity.
Q: Please share your thesis in more detail.
A: The core thesis is straightforward: Limbach is transitioning from a lower-quality, general-contractor-driven business to a higher-quality, owner-direct model that produces deeper, longer-lived, and more-profitable customer relationships. Owner-direct work not only comes with significantly higher margins — it’s also shorter in nature, making it less working capital intensive. As the mix shifts, the business becomes more predictable, more profitable, and more valuable. In parallel, the company has been deploying its free cash flow into acquisitions of smaller regional operators at around 5x EBITDA — a highly fragmented industry in early stages of consolidation where there are few natural buyers. That combination of business model improvement and capital deployment at attractive returns should allow free cash flow per share to grow at attractive rates for many years.
Q: Why does this opportunity exist?
A: The market isn’t yet pricing in LMB’s acquisition engine. The track record is there — buying at 5x, improving the businesses, and generating strong returns on capital — but the stock hasn’t caught up to it. With a clean balance sheet and strong free cash flow, the company has significant capacity to keep deploying capital at those returns, which should compound shareholder value meaningfully over time.
Q: What is the company’s current valuation and how does that compare to your target price?
A: Today the stock sells for around 10x EBITDA and 13x FCF. I believe that inclusive of acquisitions, the company should be able to compound its per-share FCF at 20% and that if they do this, the multiple should expand.
