This a pretty simple one to work out - you simply have to take a...

This a pretty simple one to work out - you simply have to take a view on the pro forma EBIT margin management will get out of the 3 divisions to work out if the stock's fairly priced or cheap.

- Pro forma SOI of 423m * price = PF market cap of $51m. $4m PF net debt gives PF EV of $54m.
- Pro forma management forecast revenue of $500m.
- Plug in your assumed PF EBIT margin. History suggests the contracting business will do anything from 0% (2014 estimate, after adding back impairments and goodwill writedowns, and allocating corporate overhead) to 6%, the building division will do something between 1% (2013 adj. number) and 5% (2009-2010 figures), and the maintenance division will do something between 2% (2013 adj. number) and 5% (2012).

If you think the sustainable EBIT margin in aggregate for this business is north of 3% (and take the $500m revenue forecast as a given, which it should be given the predictable nature of the business' revenues), the stock's trading on a PF15 P/E of about 5x (assumes $1m PF interest costs and 30% tax) or better, which is cheap even for a business of this quality (i.e. low). A 5% forecast EBIT margin generates a PF P/E of roughly 3x, which is screaming cheap; on the counter, a 1.5% EBIT margin (i.e. you think the business is doomed and won't recover despite management's turnaround strategy) produces a P/E of about 11x, which isn't cheap.