Industry

A classification that refers to a group of companies that are related in terms of their primary business activities.  There are dozens of different industry classifications, which are typically grouped into larger categories called sectors.

Industries, like companies, typically go through a growth-mature-decline phase. Industries are often studied by investors  as stocks in the same industry group often rise and fall together due to their facing the same conditions. Companies operating in the same industry can also be compared to each other to evaluate the relative attractiveness of a company within that industry.

William O’Neil, founder of CANSLIM system, believes in investing in companies in strong industries/sub-industries to benefit from the general rise in the tide.