Cheapness is a top characteristic Warren Buffett looks for in stocks, though they must also be high-quality companies. It makes sense then that his holdings would include quite a few companies with low price-to-earnings (P/E) ratios. 

The lowest of the low in Buffet's portfolio are: General Motors (GM), ConocoPhillips (COP), Gannett Co. (GCI) and General Dynamics (GD).

General Motors 

Buffett bought 10 million General Motors shares at an average price of $25 in the first quarter of 2012. The company currently has a P/E ratio of 5.3, after a steady year-and-a-half plunge.

GM, the world's top-selling automaker, returned to public trading on the NYSE in 2010, after emerging from Chapter 11 bankruptcy with the help of the U.S. government. In 2011 GM posted the largest annual profit in its history, with earnings of $7.6 billion. But with the government retaining almost 30% ownership, GM's stock price showed only a mild reaction to the news.

GM's May sales were the highest in 33 months. Consumers purchased 245,256 vehicles in the U.S., up 11 percent year over year, and the highest level since August 2009. Buick and GM sales both were up 19%, and Chevrolet was up 10%.

GM also reinstated its dividend on June 12. The payment will be $0.59375 per share quarterly on its Series B mandatory convertible junior preferred stock.

ConocoPhillips 

Buffett had 29,100,937 shares of COP at the end of third quarter 2012, down from a peak of over 83 million in 2008. ConocoPhillips’ P/E ratio was around the high teens in 2010, then dropped to the high single digits in 2011 and dropped further still to the current level of 6 in the second quarter of 2012.

On April 4, ConocoPhillips announced it would split into two by spinning off its downstream businesses and remaining an upstream company. The distribution of one share of Phillips 66 for every two shares of ConocoPhillips stock took place on April 30.

On April 24, COP announced that its first-quarter earnings of $2.9 billion were slightly down from $3 billion the previous year, which coupled with the decline in stock price produced a low P/E.

Gannett

Gannett, a Buffett holding since before 2007, is just 0.035% of his portfolio. It has a 6.5 P/E, about the middle of its range for the last several years.

In the first quarter of 2012, Gannett’s earnings fell 22.7% from the prior-year quarter. The company’s results were impacted by strategic investments and advertising softness. All of its segments were profitable, with growth in the broadcasting and digital segments of 8% and 7%, respectively. Digital revenue in its publishing segment rose 13%, highlighting its efforts to push toward digital platforms.

General Dynamics 

Buffett owned 3,877,122 shares of General Dynamics at the end of the first quarter 2012, a new holding since the third quarter of 2011. GD has a P/E of 8.6, after generally declining for the last several years. Prior to the recession, GD had P/Es in the high teens.

A factor weighing on GD, the world’s fourth-largest defense contractor, was uncertainty regarding the government’s military budget. In the first quarter, Jay Johnson, chairman and CEO, said, “General Dynamics’ first-quarter performance reflects continued growth in our Aerospace segment as well as the challenges presented by today’s dynamic U.S. federal procurement environment. We are continuing to see slower-than-anticipa​ted award activity, particularly relating to our IS&T programs with validated requirements and approved funding.”

U.S. budget cuts of 10% over the next decade, or $52 billion per year, go into effect Jan. 2, 2013, if Congress doesn’t agree to a deficit-cutting plan. This would include a $500 billion “sequester” of the defense budget over the next five years.

See all of Warren Buffett’s stock holdings at Berkshire Hathaway here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Warren Buffett.

More from GuruFocus

• Interview with the Giants of Investing
• Buffett's Recent Comments on IPOs, banks
• Buffett Would Make This Investment