Just because a stock lags behind the broader market doesn't make it a good or bad investment. You need to dig a little more deeply to understand what's going on. Here's why Stanley Black & Decker's (NYSE: SWK) laggard performance over the past year could make it a good addition to your portfolio -- and why Carvana (NYSE: CVNA) and Annaly Capital Management (NYSE: NLY) are best avoided.

Stanley Black & Decker is an industrial company that makes tools. It has a highly cyclical business with notable exposure to retail customers, which tends to lead to very rapid business downturns.

That's exactly what took place in 2022, when adjusted earnings fell to $4.62 per share from $10.48 in 2021. It's going to be another bad year in 2023, as well with management guiding to adjusted earnings of zero to $2 per share.

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Source Fool.com