what is a laggard 
a laggard is a stock or security that is underperforming relative to its benchmark or peers a laggard will have lower than average returns compared to the market a laggard is the opposite of a leader understanding laggardsin most cases a laggard refers to a stock the term can also however describe a company or individual that has been underperforming it is often used to describe good vs bad as in leaders vs laggards investors want to avoid laggards because they achieve less than desired rates of return in broader terms the term laggard connotes resistance to progress and a persistent pattern of falling behind as an example of a laggard consider stock abc that consistently posts annual returns of only 2 percent when other stocks in the industry post average returns of 5 percent stock abc would be considered a laggard if an investor s portfolio contains laggards these are most likely to be sold off first holding a stock that returns 2 percent instead of one that returns 5 percent costs you 3 percent 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 money the reason for a laggard s subpar performance is usually specific to the company maybe they lost a big contract maybe they are currently dealing with management or labor issues maybe their earnings are eroding in an increasingly competitive environment and they haven t found a way to counteract the trend risks of buying laggard stocks