Some stocks are referred to as cyclical stock because they tend to be in favor for several years and then out of favor for several years. This is a correct use of the term cyclical.

Question

Quizplus · Accepted Answer

Cyclical stocks are those whose performance is strongly tied to the economic cycle, showing higher returns during economic booms and lower returns in downturns, hence the pattern of being in and out of favor over several years.

Some Stocks Are Referred to as Cyclical Stock Because They