Limbach Holdings Inc [LMB] still undervalued after 160% Gains in 3 Months

Limbach Holdings Inc [NASDAQ:LMB] is trading at an interesting price level at the moment. After months of gains, the stock formed what looks like a bearish reversal pattern in yesterday’s session. This is most likely a short-term correction as investors take profits. For context, the stock is up by over 160% since July and emerging macro issues could lead investors to book profits. 

One such factor is the upcoming U.S election that is a contest between two candidates with divergent views on issues that have an impact on the equity markets. There is also the latest news that the U.S president and his wife have tested positive for COVID-19. This has triggered a sell off across the markets, and for stocks that are already in huge gains, the uncertainty it has created could trigger profit taking. 

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Nonetheless, this stock remains fundamentally strong, and any correction presents an opportunity for buyers. For context, the stock has been performing well all through the pandemic period. This means that demand is strong and the company has what it takes to keep gaining especially now that the lockdowns have eased up, and a vaccine is near. News of a working vaccine could see an increase in optimism in the entire market and that would include already strong stocks such as Limbach Holdings Inc. 

Internally, the company has pretty strong fundamentals that could see it keep gaining in value in the near-term. A month ago, a fund manager did a breakdown of this stock and it was quite impressive. One of the things he noted was that this company has blue chip customers. This basically means that it is not at risk of losing clients easily due to short-term macro factors. He added that the company has been aggressively bidding on new projects after it created a committee to oversee the pricing of new projects. Essentially this means that its revenues stand to keep growing going into the near future. As revenues grow, the same will reflect in the stock price.

Then there is the aspect of speculation.  There is speculation that this stock has the potential to hit $20 short term. Since this is almost double the cost of the stock at the moment, investors are likely to keep bidding it up out of the fear of missing out.   This coupled with the stock’s strong fundamentals could see it keep gaining in value short-term. 

About Limbach Holdings Inc

Limbach Holdings Inc provides specialty contract services in the U.S. It is based in Pittsburgh, Pennsylvania.