These example sentences are selected automatically from various online news sources to reflect current usage of the word 'laggard.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
Laggard describes a stock that fails to perform as well as the overall market or a group of peers.
How It Works
In a broad sense, the term laggard connotes resistance to progress and a persistent pattern of falling behind. In a financial sense, a laggard may be a stock or other market-traded security that has historically underperformed on a consistent basis. For example, if biotechnology stock ABC consistently posts annual returns of only 2% when other stocks in the industry post average returns of 5%, stock ABC would be considered a laggard.
Why It Matters
If you hold them in your portfolio, laggards are generally the first candidates for selling. In the example above, holding a stock that returns 2% instead of one that returns 5% costs you 3% each year. Unless there is some solid reason to believe that a catalyst will lift shares of a stock that has historically lagged its competition, continuing to hold the laggard costs you money.