When Warren Buffett speaks, Wall Street listens. That's because the CEO of conglomerate Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) has generated more than $81 billion in wealth for himself and well over $400 billion for Berkshire's shareholders over the course of many decades.

Buffett's investing strategy, while relatively simple, has proved exceptionally effective. By focusing on just a few sectors of the market, Buffett aims to buy into brand-name businesses that demonstrate clear competitive advantages. He then holds onto these investments for a significant period of time, allowing his thesis to come to fruition. More often than not, this leads to substantive long-term gains for the Oracle of Omaha.

As of the end of 2019, Berkshire Hathaway owned a stake in 52 securities, many of which would be considered neither pricey nor inexpensive on the valuation front. However, a deeper dive into Buffett's portfolio reveals that three of his holdings actually are valued at or very much near historically low valuations. Keeping in mind that there are a number of fundamental metrics that can be used to determine perceived value, here are three Buffett stocks that are historically cheap and may be worth a closer look by investors.

Berkshire Hathaway CEO Warren Buffett at this company's annual shareholder meeting.

Berkshire Hathaway CEO Warren Buffett at this company's annual shareholder meeting. Image source: The Motley Fool.

Amazon

First off, there's e-commerce giant Amazon (NASDAQ:AMZN), which is a company that few investors would probably consider to be cheap using traditional fundamental metrics, such as the price-to-earnings (P/E) ratio. However, Amazon doesn't exactly fit the definition of a traditional business.

Rather, this is a company that takes much of its operating cash flow and reinvests it into e-commerce, logistics, cloud-service operations [Amazon Web Services (AWS)], streaming content for Prime members, and numerous other initiatives. That, in my view, makes operating cash flow a much more accurate measure of value for Amazon than the P/E ratio.

According to estimates from Wall Street, Amazon's operating cash flow is set to explode higher in the upcoming years. While e-commerce has been a blessing for Amazon with regard to bringing consumers into its product ecosystem, retail itself is a relatively low-margin segment. Instead, Amazon is banking on AWS to drive its growth going forward.

In 2019, AWS' growth rate was more than double that of e-commerce, all while providing $9.2 billion of the company's $14.5 billion in operating income. In spite of providing only 12.5% of total sales, AWS is already responsible for the bulk of Amazon's operating income and margins

Over the past decade, Amazon has been valued between 23 times and 37 times its annual operating cash flow. But as of Wall Street's 2020 estimates, Amazon is currently going for just 20 times cash flow. Looking even further down the road, Amazon is valued at a little more than 10 times consensus 2023 cash flow per share.

Amazon may not fit the bill of a traditional value stock, but it's historically cheap.

Delta Air Lines plane in flight.

Image source: Delta Air Lines.

Delta Air Lines

Another Buffett stock that's flying lower than it has in a very long time is Delta Air Lines (NYSE:DAL).

Warren Buffett made a surprising move in the second-half of 2016 when he chose to scoop up shares in a number of major and national airlines, which included Delta. The likely thesis here is that West Texas Intermediate crude briefly plunged below $30 a barrel in the first half of 2016, opening the door for a windfall of profits for airlines.

Falling crude prices not only sent jet fuel costs significantly lower (jet fuel is typically the largest line-item expense for airlines), but it substantially reduced the ticket-price advantage of bare-bones airlines like Spirit Airlines. In effect, it allowed companies like Delta Air Lines to be considerably more price competitive and win customers' business with their loyalty programs.

Buffett is also a big fan of old-school value, and that's what Delta Air Lines brings to the table. Right now, Delta is valued at six times next year's consensus earnings per share (EPS) on Wall Street and a seemingly reasonable 1.9 times its book value. We have to go back eight years to find the last time that Delta was consistently valued at a forward P/E of under 6 and to 2008 to find a time when it had a lower price-to-book valuation.

Nevertheless, short-term concerns remain regarding travel and capacity with the coronavirus disease 2019 (COVID-19) spreading globally. Additionally, the airline industry has never fared well during recessions, and Delta is lugging around $15.1 billion in net debt at the moment. It is historically cheap, but Delta Air Lines comes with more "baggage" than a company like Amazon.

Generic-drug tablets lying atop a one hundred dollar bill, with Ben Franklin's eyes visible between the tablets.

Image source: Getty Images.

Teva Pharmaceutical Industries

A final Buffett stock that's really pushing the boundaries of being cheap is brand-name and generic-drugmaker Teva Pharmaceutical Industries (NYSE:TEVA). Unlike Amazon and Delta Air Lines, which have mostly been firing on all cylinders, Teva has been an utter disaster in recent years.

Without rattling off the full gamut of issues, the company has settled a bribery claim, been named in a 44-state lawsuit against opioid manufacturers, had its top-selling brand-name drug (Copaxone) face generic competition, witnessed significant executive turnover, and has contended with generic-drug pricing weakness. All of these issues have weighed down Teva's earning capacity and killed a once-healthy dividend.

But there may be light at the end of the tunnel. Teva Pharmaceutical's no-nonsense CEO Kare Schultz is a turnaround specialist. By the end of 2020, his company will have reduced full-year operating expenses by roughly $3 billion, all while a combination of reduced costs and noncore asset sales have reduced net debt by approximately $8 billion. There's no doubt that Teva still has work to do with regard to further reducing its debt and settling opioid lawsuits, but Schultz has masterfully navigated the choppy waters thus far.

Currently, Teva is valued at a mere four times next year's consensus profit forecast and 88% of its book value. Both figures are only slightly above its decade lows, set last year. While Teva will require patience from its shareholders, it appears as if the worst is now over.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.