Ugly carpeting and bad paint can be quite fetching to a real estate investor because both are easy to fix and can shave plenty off the purchase price. A bad roof or faulty foundation might not be worth the hassle, however. The companies listed below have room for improvement but no fatal flaws, and their shares seem cheap. Attributes like those can catch the attention of corporate suitors, and even if they don't, perhaps they warrant a look by long-term investors.

Each company has a single-digit "EV/Ebitda" ratio. EV, as I wrote this week, is enterprise value, or the cost to buy all of a company's shares and pay off everything it owes while applying its available cash to the transaction. Ebitda stands for earnings before interest, taxes, depreciation and amortization, and is used to compare the core profit potential of companies. EV/Ebitda, then, is a company's true takeover price relative to its earning power -- just the sort of thing merger-and-acquisition specialists are interested in.

These companies generated a surplus of cash from their operations over the past year. Their operating margins are subpar for their industries, however, and their corporate overhead seems relatively high. In a merger, corporate overhead is often a fertile source of cost-cutting, making it the kind of flaw that can sweeten a deal rather than sour it.

King Pharmaceuticals

EV/Ebitda: 3.9

Bristol, Tenn.-based King Pharmaceuticals might need "its own Thrombin to stop bleeding," wrote investment bank Jefferies & Company earlier this month, referring to King's popular coagulation aid for wounds, and to its recent string of setbacks. A denied patent petition puts the company's EpiPen for life-threatening allergic reactions closer to facing generic competition. A January inspection of two King plants found more than a dozen issues that need attention. The company missed analyst profit forecasts by a lot last quarter. The stock price is three-quarters lower than it was a decade ago. On the plus side, King shares now sell for a modest 11 times earnings, and the company has a promising portfolio of abuse-resistant pain killers -- opiate narcotics whose recreational appeal is chemically blocked. According to Louise Chen, an analyst with investment bank Collins Stewart, the drugs have potential for peak sales of $1 billion, or well more than half of recent companywide sales.

Intuit

EV/Ebitda: 9.9

In 1994, Microsoft tried to buy Intuit, maker of Turbo Tax and Quicken, for $1.5 billion. The Department of Justice sued in April 1995, saying the deal would harm the market for personal finance software. Weeks later, Microsoft abandoned the idea. Today, Quicken has an estimated retail market share of 90% in personal finance software and 80% in tax software, and has a stock market value of more than $11 billion. Perhaps it's no longer a takeover candidate, but the company has plenty of room to improve on its own. Its operating margins have recently merely matched those of H&R Block, a firm that bears the cost of operating a chain of stores. That could soon change. Intuit has high fixed costs but low variable ones, and its sales growth has accelerated recently. Analysts expect the company's earnings per share to increase by 12% over the next year.

Big Lots

EV/Ebitda: 5.4

Five years ago, Big Lots, the nation's largest closeout retailer, turned just a penny of each sales dollar into operating profit. Management closed underperforming stores, cut transportation, health care and headquarters costs and installed a new point-of-sale system, and last year, seven cents of each sales dollar became operating profit. The number could climb a few cents more in coming years, according to analysts, if the company makes good on its plans to cut energy and advertising costs, improve merchandise quality to raise the average checkout amount and continue to expand its member rewards program. Earnings per share are expected to increase 21% this year, more than double the growth forecast for Wal-Mart. Of the two discounters shares, those of Big Lots are slightly cheaper at 11 times earnings.