Price/earnings ratios are slippery things. Everyone agrees on how to find share prices, but there are a dozen or more measures of earnings per share, and some can produce results wildly different from others.

Should you opt for conservatism by using the past year s earnings or try to be more current by relying on forecasts for the coming year? Are earnings measures that exclude one-time charges less distortive than those that include them, or merely more generous? Should we anticipate the dilutive effect of outstanding stock options when dividing earnings by the number of shares outstanding? What about taking an average of several years' worth of earnings to adjust for swings in the business cycle?

I recently rolled my own price/earnings ratio in a search for stock bargains among S&P 500 members that is, large American companies. I started by assuming that, although the past four quarters of earnings are perhaps unfairly low considering the recent financial crisis, the ambitious forecasts for the next four quarters can t quite be trusted. So I summed all eight quarters and divided by two to get a half-gloomy, half-optimistic year s worth of profits and used this measure to calculate a P/E ratio. Note that I used a measure of earnings per share that ignores one-time charges and assumes a fully diluted share count, and I eliminated any company that hadn t turned a profit during the past year or wasn t expected to in the coming one; plenty of banks and home builders dropped from the list.

I didn t make any P/E adjustments for differences in companies growth potential because that s a difficult thing to quantify without putting too much faith in forecasts, but I did cut any company from the list that hadn t increased its sales over the past four quarters. The average P/E on remaining stocks was nearly 20. The three listed below have P/Es that are at least one-third lower.

GameStop

P/E: 7.6

It s not a great sign when a company s chief financial officer resigns after less than six months on the job, but it s not necessarily a sign of accounting problems, either. GameStop s CFO left in late February. Arvind Bhatia, who covers the stock for investment bank Sterne Agee, wrote in a note to clients that after four conversations with GameStop executives, he s convinced the departure was simply the result of a job offer from Wal-Mart. Financial results for the videogame chain have disappointed investors over the past year but only because of the company s earlier pattern of blazing growth. Shares are down 20% this year and 31% over the past year, but sales have increased slightly over the past year, and earnings have declined only a little. The result is a financially strong company with decent growth potential and even a smidgen of recession resistance (it does a brisk trade in used videogames, after all), whose shares trade with a single-digit P/E ratio.

L-3 Communications

P/E: 11.7

L-3 Communications is a defense contractor, but investors can think of it as a mutual fund of sorts. The New York-based company has long focused on acquisitions, cost-cutting and cash flow, and left the production of spy systems, aircraft and communications equipment and the providing of military support services to the companies in its portfolio. Investors are no doubt worried about cuts to America s defense budget, which, at well more than one-quarter of the federal budget (including spending outside the Department of Defense), indeed seems bloated relative to peer nations. Still, L-3 is increasing its sales and profits; it pays a modest dividend (yield: 1.7%); and it seems amply discounted for even severe cuts to defense spending.

McKesson

P/E: 13.4

McKesson distributes drugs and medical products and is a major provider of information systems to health-care providers. As such, it s well positioned to benefit from a government push for doctors and hospitals to modernize their record-keeping. Sales and profits for the company are growing steadily and its balance sheet shows more cash than debt. Charles Rhyee, who covers the stock for Oppenheimer, wrote last month that McKesson will likely put $1 billion to $2 billion of its cash stockpile to work soon. Whether it spends the money on acquisitions or share repurchases, the result could be a boost to future earnings per share of 30 cents or more, says Rhyee. The company is forecast to earn $4.62 a share in its fiscal year ending March 31, an increase of 8% from last year.

Corrected on March 4, 2010: The story originally misstated the selection criteria used in the screen. The companies listed have price/earnings ratios that are one-third lower than the group average.