UCW Ltd (ASX:UCW) for Data#3 Limited (ASX:DTL)
I sold Data#3 Limited (ASX:DTL) in order to buy UCW Ltd (ASX:UCW). IT service provider DTL looks quite pricey at around 20 times forward earnings, although the business is performing well. Higher education provider UCW has just reached profitability and is growing fast. Looking forward, there is a good chance that margin improvement will accompany this growth. The group generated $2 million of free cash flow in 2019 (prior to acquisitions) and has a market cap of under $20 million with no net debt.