COVID-19 did a number on the stock market -- several numbers, in fact.

From Jan. 1 to the market's bottom on March 23, the New York Stock Exchange Composite Index lost 37% of its value. True, the NYSE then rebounded in April, and has risen 48% through Wednesday's close -- but here's the funny thing about percentages:  

If a $100 stock drops 37%, then rises 48% ... you might instinctively feel you should end up 11% ahead (because 48 minus 37 equals 11). But it doesn't work that way. In fact, your stock would be worth only $93 after that down-and-up cycle, and you'd still be 7% behind where you started -- just as the NYSE index is today.

3 arrows trending down over a background of a map and dollar signs

Image source: Getty Images.

Some NYSE stocks are down by far more. Currently, the three worst-performing NYSE stocks year-to-date (among small-caps and larger -- anything with a market cap above $200 million) are Hertz Global (HTZG.Q), Callon Petroleum (CPE), and Invesco Mortgage Capital (IVR 0.33%). But just because these stocks are trading at small fractions of their prior values, does that make them buys?

HTZ Chart

HTZ data by YCharts

Hertz Global: Down 90% year to date

Well, think about it. Stocks don't go down by accident, right? If shares of car rental company Hertz, for example, cost more than $16 at the start of the year, but they cost less than $2 today ... there's probably a reason for that.

In Hertz's case, the reason the stock is down by about 90% so far in 2020 is that the company has posted three straight money-losing quarters, and is expected to continue losing money as far out as the eye can see. Ultimately, this string of losses, combined with the fact that there are few prospects for its business to recover during an extended period when almost nobody is traveling by air (and renting cars at their destinations), forced Hertz to file for Chapter 11 bankruptcy protection in May.

Hertz management has warned investors away from buying its stock, confiding that "there is a significant risk that ... our common stock will be worthless" at the end of the bankruptcy process. Heedless of the risks, though, traders have continued to jump in and out of the stock -- at one point bidding its price up 10 times higher than what it was the day the bankruptcy filing was announced.

Invesco Mortgage Capital: Down 81% year to date

The real estate investment trust Invesco hasn't filed for bankruptcy yet, but it's dealing with its own particular near-death experience.

Dividend investors often favor mortgage REITs like Invesco for their generous dividends, but in Invesco's case, the massive $1.6 billion loss it incurred in the first quarter caused the company to slash its dividend from $0.50 per quarter to just $0.02. Things only improved a bit in the second quarter, for which it reported results last week -- a $300 million loss.

Result: In just the last six months, Invesco's book value per share has plummeted from $16.29  to just $3.17, which is less than the stock currently sells for. Investors may hope for a rebound, but as my fellow Fool Brent Nyitray recently pointed out, "REITs generally stick around book value and are supported by their dividend yield." Given that Invesco is now trading at higher than book value, and its dividend is yielding a ho-hum 2.5%, there's little to like about this stock.  

Callon Petroleum: Down 79% year to date

And finally, there's Callon Petroleum. The oil exploration firm's fortunes are tied to the state of oil market -- and as you may have noticed, oil prices aren't looking too healthy. While West Texas Intermediate is no longer trading for actual negative prices, a barrel of crude today still fetches barely two-thirds of what it did at the start of the year.  

Low oil prices have devastated Callon's profitability. According to data from S&P Global Market Intelligence, it booked a $1.5 billion loss last quarter -- losing more money in three months than it had earned in the previous 20 years combined. And this unprofitable oil company labors under a balance sheet loaded down with $3.4 billion in long-term debt, against just $7.5 million in cash.

Suffice it to say that, if you want to survive a recession, there are better ways to start out than unprofitable and deep in debt.

Invest in success

Having considered all the above, I'll repeat the question: Should investors consider buying these three worst-performing NYSE stocks now? But I think the answer is obvious:

No, I do not think that now is the time to buy these stocks -- because its important to consider not just the cheapness of a stock's valuation, but also why it's so cheap. There are serious obstacles standing between each of these companies and future success, and I'm not at all convinced that any of them can surmount them. So at this point, I would suggest you heed the advice of master investor Warren Buffett, who has often said that it is "far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

To that, I would only add that far worse than either of those is to buy a company on its death bed -- no matter how cheap its price.