Generally speaking, when you buy a stock, it doesn’t really matter whether it’s a good company or not and whether you’re investing with a long-term mindset. But that doesn’t mean that buying a stock that’s trading at a discount doesn’t help your overall returns. Doing this will help you get more bang for your investment money.

However, not all discount stocks are necessarily worth buying. There’s always more to the story. Sometimes a stock decline is a warning of even more trouble ahead.

Before diving blindly into October’s worst performance S&P 500 (SNPINDEX: ^GSPC) Let’s take a look at the rest of the story just because stocks are suddenly trading cheaper. You may not want to buy any of these just yet.

worst of the worst

Getting straight to the point, the S&P 500’s biggest losers last month were: Super Micro Computer (NASDAQ:SMCI), corvo (NASDAQ:QRVO), Huntington Ingalls Industries (NYSE:HII)And Estee Lauder (NYSE:EL). Every stock was downright boring for most of the month. But just in the last two days of October, each stock index lost around 30% compared to a 1% decline.

^SPX data Y Charts

There’s a common thread: last quarter’s earnings and/or guidance for the current quarter. Many companies across a wide range of industries are finally feeling the impact of economic difficulties.

To take semiconductor For example, Qorvo company. Although it beat its upper and lower estimates for the three-month period ending in September, its revenue expectation of nearly $900 million for the ongoing quarter fell short of analysts’ consensus of $1.06 billion. The company cited stiff competition and weak smartphone demand as the main reason for its lackluster outlook.

Estée Lauder’s story is a similar one, but arguably worse. While first-quarter financial results were roughly in line with expectations, they were still below year-ago comparisons. But the crux of the stock’s sharp selloff was the company’s decision to cut its dividend and withdraw its full-year guidance, mostly due to uncertainty about its business in China. Despite the country’s new stimulus efforts, CEO Fabrizio Freda said: “Consumer sentiment in China weakened further in the first quarter.” “We still expect strong declines in the sector in the near term,” he added.

The underlying economic lethargy may even be undermining government spending to some extent. Not only did Huntington Ingalls’ quarterly earnings fall short of forecasts, but the shipbuilder was forced to lower its five-year cash flow outlook due to new doubts about a contract with the U.S. Navy and supply chain challenges.

What about Super Microcomputer? This is a bit of an anomaly, as he is the only one of the remaining four names to fail for a reason other than earnings. Accounting firm Ernst & Young resigned as auditor of the company He said last week that the firm “does not want to be associated” with the technology company after it allegedly ignored concerns about Supermicro’s accounting practices and internal controls. While the departure of Ernst & Young does not mean that the company has failed to achieve the excellent results it has reported recently, it does call those results into question.

Opportunity or omen?

So what happens now?

The discounts are certainly deep. And although every company clearly has problems right now, none of them are insurmountable. Many of these are temporary in nature and actually arise from predictable cyclical challenges. Even the Super Micro Computer’s woes will eventually be reflected in the rearview mirror.

But this is a situation where interested investors may want to take a step back and read about it as everyone knows it, starting with the scope and size of these sales.

Simply put, there’s more going on here than immediate overreactions to a handful of disappointing quarterly reports. These steep sell-offs are an indication of how quickly and how decisively the market is jumping to bearish conclusions.

See, it’s not just these four signs. While these are the worst of the worst, several dozen members of the S&P 500 posted double-digit losses in October. Some of these disruptions were related to earnings. Others just because. But all of this likely underscores broader concerns about future earnings and overall market valuation. Last 12 months of the S&P 500 price-earnings ratio Its forward ratio is 25 and its forward ratio is 24, above long-term bull market norms.

Perhaps investors are looking for ways and reasons to change these numbers without even realizing it.

And that’s what makes buying any of these fallen stocks such a dangerous proposition right now. These four names have already been identified as the market’s biggest targets. Rightly or wrongly, investors can maintain or even encourage a “piling” attitude towards these stock prices, pushing them even lower before they reach their eventual lows.

What makes them even riskier is that these four companies are struggling for reasons beyond their control, leaving them somewhat powerless to combat these challenges.

Huntington Ingalls’ business, for example, was almost exclusively shipbuilding for the unstable U.S. Department of Defense. Estée Lauder’s target market is similarly fickle; many regular cosmetics users are constantly looking for something new and often look for brands outside of the obvious big brands.

For example, consumer research firm McKinsey reported earlier this year that nearly half of consumers generation Z While consumers try a new beauty brand every two to three months, only 60% of this crowd claims to be truly loyal to a particular cosmetics brand. Between an increasingly crowded market and a lethargic economy, Estée Lauder’s future is far from promising.

It looks like investors are finally starting to feel it.

Not forever but definitely for now

This won’t always be the case. Sooner or later, each of these companies will be better off than they are now. Stocks will do the same. After all, nothing lasts forever, including weakness.

But until then, consider the larger lead decline due to the size and number of post-earnings and guidance-driven declines. We’re in an environment where investors are quick to sell en masse and companies can deliver enough news to trigger that selling. It may take some time to get over this difficult period. These four names are probably best avoided because they are the poster children for this dynamic.

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James Brumley It has no position in any of the stocks mentioned. The Motley Fool recommends Qorvo. The Motley Fool has a feature disclosure policy.