Cheapest S&P 500 Stocks: Ford, AIG, and Leucadia

Warren Buffett appeared on CNBC this morning and reiterated his bullishness on the U.S. equities. As a noted valued investor, Buffett tends to look for undervalued companies that are trading below their intrinsic values. Investors could see this as a signal that despite the recent rally in the equity markets, there are still a large number of stocks that are inexpensive. Benzinga took a look at three S&P 500 companies with the lowest trailing P/E ratios. 1. Ford

Market Cap $46.8 billion

P/E ratio 2.44 The Detroit-based auto manufacturer has emerged strongly from the financial crisis and the company's new fuel-efficient car models are selling well. Ford's CEO, Alan Mulally, was able to turn the company around and bring it back to profitability. In 2011, Ford's net income was $20.21 billion. 2. AIG

Market Cap $54.3 billion

P/E ratio 3.6 American International Group is an international insurance organization with customers in more than 130 countries. AIG needed a government bailout in 2009, as the company had underwritten a large number of credit default swaps on securities that went underwater during the financial crisis. The company has returned to profitability and reported Q4 2011 net income of $19.8 billion. The U.S. government still owns approximately 76% of AIG. 3. Leucadia National

Market Cap $7.1 billion

P/E ratio 4.5 Leucadia National is a holding company engaged in businesses, including manufacturing, land based contract oil and gas drilling, real estate activities, medical product development, and winery operations. The stock is up nearly 30% on the year and broke above its 200-day moving average earlier this month. In the last quarterly report, Leucadia posted a net loss of $291K. Although these companies' valuations make them seem attractive, they are not necessarily good buys. The cheap valuations can also be caused by the expectations of poor future earnings.