One of the classic ways of valuing a stock is calculating its price-to-earnings ratio , which measures the price of the stock in relation to the company's net income per share. The lower the P/E ratio, the better the buy. The P/E ratio is used along with other financial metrics to determine the valuation of a company compared with its competitors and the overall industry. Because Warren Buffett is one of the most successful investors, Stockpickr decided that it would be useful to review all of his stocks and break out the stocks with the lowest P/E ratios. The Warren Buffett stock with the lowest P/E is USG ( USG), a building materials distributor with a P/E of 8.8. The company is scheduled to report third-quarter earnings today. The stock, which happens to have the highest short ratio of all of Buffett's stocks -- 13.7 -- has a P/E-to-growth (PEG) ratio of 2.6. USG is also owned by the "other Oracle of Omaha," Wally Weitz, who manages the Weitz mutual fund family, which follows a value-disciplined approach to investing. Weitz also owns UnitedHealth Group ( UNH), which has a P/E of 15, and insurer American International Group ( AIG), which has a P/E of 10.6. Another low-P/E stock that Buffett holds is Bank of America ( BAC), with a P/E of 10. The company just last week reported a 32% drop in third-quarter earnings on a revenue drop of 12%, due to unfavorable results of its investment bank unit and higher consumer credit costs. The stock has a PEG of 1.4 and a yield of 5.1%.