Let's be honest, Jasco (JSC) is essentially going through a structured turnaround after its acquisition of the under performing MTec.

Stepping back from the complexities of Jasco and its diverse products, services and markets, it is perhaps easier to understand the business by what we believe are the three major drivers of the Group’s prospects:

1. Eskom spending: Both Eskom’s roll-out of maintenance and expansion capex, especially in transmission, and Jasco and M-Tec’s ability to win this spending are key in the Group’s future.
2. Telecos and telecommunications spending: The Group’s provision of cable, hardware and services to the telecos industry and its provision of telecommunication solutions to the enterprise (i.e. corporate) market mean that spending and competition in these markets are key in its future.
3. Group restructuring and cross-selling: The ability of the management team — including the new CEO — to simplify and rationalise the Group’s historically complex and dispersed group structure and, thus, extract synergies while making strategic bolt-on acquisitions will be a key internal determinant in the Group’s future.

Overall, the fundamentals of these drivers do actually look quite positive...

But what about Jasco's prospects?

Well, let me phrase it this way: if you are positive about Jasco, its turnaround and its new CEO, then the share could be very undervalued:

Basically, Jasco's share are not just trading below its historical average book value, but outside of one standard deviation below this average... If you don't know statistics very well, just take my word for it when I say that this is deeply discounted against its historical average Price-to-Book ratio.

Food for thought.