This Is the Tech Star Your Portfolio Needs

A series of well-executed deals, acquisitions, and partnerships are all lined up to make Stars Group Inc. (TSX:TSGI)(NASDAQ:TSG) a promising long-term growth pick.

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If there’s one area of the market that I tend to deviate more to, it would have to be towards technology stocks. No other area of the market provides such promise, allure, and opportunity as the innovative solutions coming out of the tech sector.

One such investment opportunity comes in the form of Stars Group (TSX:TSGI)(NASDAQ:TSG).

Online gaming and gambling companies such as Stars Group still carry a certain amount of taboo in some circles, despite being what is otherwise an incredible investment opportunity. Here are several reasons investors that have passed on the stock in the past may want to reconsider that decision now.

New markets, new opportunities

Few people may realize this, but Stars Group only operates in a small part of the market at the moment. More specifically, you can only partake in the Stars Group’s array of online poker and casino games in the parts of the world where it has been legally allowed to do so. In the U.S., for example, this translates into a handful of markets such as New Jersey and Pennsylvania, where the company currently operates.

An agreement reached last month with Eldorado Resorts will eventually bring the number of U.S. states where Stars Group can operate up to 13. Commenting on the deal, Stars Group CEO Rafi Ashkenazi noted that the agreement “establishes the foundation for our U.S. strategy,” which could over time become a massive revenue driver for the company.

That announcement dovetails nicely with another major announcement that came last week, where Stars Group was named an authorized gaming operator of the NBA. The multi-year agreement with the league will almost certainly result in greater interest and exposure for the company as it tries to penetrate the highly regulated U.S. market.

Finally, Stars Group was also granted a licence to operate in Sweden, where the country’s re-regulated online gaming and gambling market will open to 12 companies including Stars Group in 2019.

Individually, each of these may be noteworthy announcements, but together they formulate an image of a company that is aggressively expanding into new markets, looking to draw in more customers and revenue, not unlike the impressive slew of acquisitions that the Stars Group completed over the past year that has made it the largest online sports betting company in the U.K., the third largest in Australia, and a growing player in a handful of other established European markets.

In terms of financials, in the most recent quarterly announcement made last month, Stars Group announced an incredible 73% gain in sales, while managing to silence critics that have, in the past, claimed the company was too focused on poker games. Poker revenue in the quarter dropped by 4%, but that was more than offset by a gain from both sports betting and casino games.

To sum up, Stars Group holds immense opportunity for investors over the long term, and investors looking for growth over the long term will be more than satisfied with what the company can offer.

Coincidentally, the stock is currently trading near its 52-week low, which makes the current opportunity that much more appealing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned.

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