Pure Play


DEFINITION of 'Pure Play'

A publicly traded company that is focused on only one industry or product. Pure play companies are popular with certain types of active investors who do a lot of research and want to make very specific bets on particular products or industry segments. For these investors, buying a company with several diversified business lines forces them to take risk in industries that they did not want to be invested in.


For some large companies, the allure of creating a pure play may make it worthwhile to spin off certain business lines or divisions into their own companies. Occasionally, the market will value the two resulting companies at a higher value than they did the original firm. This can be particularly true in hot industries and where there are few pure play companies to invest in that are already in the market.

  1. Conglomerate

    A company that owns controlling stake in a number of smaller ...
  2. Play

    A slang term that describes the positive aspects of an investment ...
  3. Stock

    A type of security that signifies ownership in a corporation ...
  4. Research And Development - R&D

    Investigative activities that a business chooses to conduct with ...
  5. Subsidiary

    A company whose voting stock is more than 50% controlled by another ...
  6. Equity Risk Premium

    The excess return that investing in the stock market provides ...
Related Articles
  1. Investing Basics

    Conglomerates: Cash Cows Or Corporate Chaos?

    Huge companies may not be as infallible as previously assumed. Find out why bigger isn't always better.
  2. Mutual Funds & ETFs

    Evaluating Green Equity Investments

    Learn how to find stocks that are both eco-friendly and profitable.
  3. Options & Futures

    Top 10 Green Industries

    Put a little green in your wallet by investing in these growing areas.
  4. Active Trading

    The Importance Of Segment Data

    Key financials often fail to provide insight into large cap companies.
  5. Budgeting

    Your Worst Financial Mistakes And Why You Made Them

    No one intends to make a financial mistake, but an unexpected disaster or poor planning could leave you in financial distress.
  6. Mutual Funds & ETFs

    Top 3 Equity Energy Mutual Funds

    Explore detailed analysis of the top three equity energy mutual funds, and learn about the characteristics and suitability of these funds.
  7. Mutual Funds & ETFs

    Top 5 Corporate Bond Mutual Funds

    Learn about the top five mutual funds that invest in corporate bonds that have investment grade quality and speculative credit ratings.
  8. Mutual Funds & ETFs

    Top 4 India Equity Mutual Funds

    Discover four of the top India-focused equity mutual funds, including their objectives, how investments are chosen and how assets are allocated.
  9. Mutual Funds & ETFs

    5 Secrets You Didn’t Know About Mutual Funds

    Learn five of the "secrets" about mutual funds that can have a significant impact on mutual fund choices and investor profitability.
  10. Investing Basics

    5 Ways to Double Your Investment

    So if you want to go double, consider these five classic strategies to help turn your vision into a reality.
  1. What are green investments?

    Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the ... Read Full Answer >>
  2. What is a pure play?

    A pure play is a company that invests its resources in only one line of business. As such, this type of stock has a performance ... Read Full Answer >>
  3. Why have mutual funds become so popular?

    Mutual funds have become an incredibly popular option for a wide variety of investors. This is primarily due to the automatic ... Read Full Answer >>
  4. What licenses does a hedge fund manager need to have?

    A hedge fund manager does not necessarily need any specific license to operate a fund, but depending on the type of investments ... Read Full Answer >>
  5. Can mutual funds invest in hedge funds?

    Mutual funds are legally allowed to invest in hedge funds. However, hedge funds and mutual funds have striking differences ... Read Full Answer >>
  6. When are mutual funds considered a bad investment?

    Mutual funds are considered a bad investment when investors consider certain negative factors to be important, such as high ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!