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A man plays online poker in 2006 file photo.Getty Images

Amaya Gaming Group Inc.

Wednesday's close: $6.62, down 7 cents, or 1.0 per cent

52-week trading range: $3.20 to $6.75 a share

Annual dividend: none

Analysts' ratings: There are 5 buys, no holds and no sells, according to Bloomberg data. Target prices ranged from $9 a share as estimated by analysts at Cantor Fitzgerald and Canaccord Genuity to $10 a share by Global Maxfin Capital analyst Ralph Garcea.

Recent history: Investors have sent Amaya shares surging 65 per cent over the past year, betting it will benefit from more relaxed rules by U.S. states for legalized online poker and other casino games. Following several acquisitions to take advantage of an expanding global gaming industry, Montreal-based Amaya is now involved in everything from Internet poker to land-based casinos and sales of gaming machines. The company's biggest deal took place last fall with the $177-million purchase of Cadillac Jack Inc., a manufacturer of slot machines. It also bought online casino games developer Cryptologic Ltd. last year, and gaming software provider Chartwell Technology Inc. in 2011. The purchases come at a time when more states consider making Internet gaming legal. Last month, Nevada became the first state where its residents can play poker online for money. Internet poker had been outlawed since 2011 when the U.S. Department of Justice seized the domaine names of offshore sites catering to U.S. customers. Amaya's stock hit a 52-week high earlier this week after the company reported better-than-expected fourth-quarter results.

Manager insight: Amaya shares are now trading on expectations of cash-hungry U.S. states legalizing online gambling as opposed to moving on earnings numbers, says Robert McWhirter, president of Selective Asset Management Inc. "To a degree, it is starting to trade like [transportation giant] Bombardier Inc. that trades on expectations in backlog."

With its latest acquisitions, Amaya is able to offer "basically one-stop shopping for a land-based casino" that wants to expand into the new frontier of legalized virtual gaming, said Mr. McWhirter, who is eyeing Amaya shares for a future purchase.

Various states are approaching Internet gaming differently, but investors will also focus on how many states will permit a full-suite of offerings as opposed to a state like Nevada, which currently only permits online poker, he said. New Jersey and Delaware have thrown the doors open to not only Internet poker, but also other online casino games, including the slots.

"I expect other states to allow Internet gaming," he said. California is only considering a bill to permit online poker. In Pennsylvania, the second-largest gambling market outside of Nevada, a bill was introduced last month to legalize all kinds of online casino games.

A near-term catalyst for Amaya is the Cadillac Jack division expanding into different markets like native-operated North American casinos with its slot machines, Mr. McWhirter said. Amaya will also benefit from the synergies from the acquisitions, and "cross-selling opportunities" because they will have different customers, he added.

A 12-month target price of $9 to $10 a share is not unreasonable for Amaya, he said. If the company can increase its adjusted earnings before interest, taxes, depreciation and amortization [EBITDA] to roughly $60-million to $63-million this year from $23-million in 2012, as some analysts expect, "that would be a further catalyst for a rising stock price," he added.

The risk to Amaya shares is the possibility of U.S. states delaying legalization of Internet gaming, or only permitting poker as opposed to an array of offerings, he said. "Because of the need of revenue by the states, I would expect that those risks are relatively low."