Pure Play

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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.

BREAKING DOWN 'Pure Play'

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.

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RELATED FAQS
  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. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  4. How can a company execute a tax-free spin-off?

    The two commonly used methods for doing a tax-free spinoff are either to distribute shares of the spinoff company to existing ... Read Full Answer >>
  5. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  6. What percentage of a diversified portfolio should large cap stocks comprise?

    The percentage of a diversified investment portfolio that should consist of large-cap stocks depends on an individual investor's ... Read Full Answer >>

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