With the FTSE 100 having fallen in recent months, a number of its constituents are trading on significantly lower valuations. In some cases, this can make them more attractive. However, for value investors there’s a danger of buying shares in a company that may be cheap, but that also has relatively downbeat future prospects. In other words, it’s cheap for a reason and this makes it a potential value trap.

Value ahead?

For example, Aberdeen Asset Management (LSE: ADN) has recorded a share price fall of 28% in the last three months and this puts it on a price-to-earnings (P/E) ratio of just 10.5. This indicates that its shares have huge upward rerating potential, with a dividend yield of 8.1% providing further evidence as to just how cheap the asset manager’s shares have become.

Clearly, Aberdeen’s outlook is rather challenging. Its bottom line is due to fall by 24% in the current year and this has the potential to put investor sentiment under even greater pressure in the near term. And with it having a focus on emerging markets such as China, things could realistically get worse before they get better.

However, with Aberdeen having a sound business model and emerging markets still offering a compelling long-term growth story, this could be the perfect time to be greedy while other investors are fearful.

Bargain buy

Similarly, buying a slice of BHP Billiton (LSE: BLT) also makes sense. Certainly, the diversified mining company has been hurt by commodity price falls and on this front, things could get worse with the prices of oil, iron ore and copper possibly declining in the coming months. However, with BHP adopting a very sound strategy to strengthen its position in the medium-to-long term, now could be the right time to buy.

For example, BHP has already spun-off its non-core assets and is in the process of generating significant efficiencies from those that remain. And with it having a very sound balance sheet and relatively resilient cash flow, BHP is in a position to take advantage of falling asset prices via M&A activity. So, while a dividend cut is on the cards and its yield of over 10% is perhaps unsustainable in the long run, BHP could be a winning investment.

Get ready for gains

Meanwhile, house prices in the UK may be high, but housebuilders such as Berkeley (LSE: BKG) continue to enjoy highly favourable trading conditions. There’s clearly a chronic shortage of housing that’s unlikely to be filled in the next few years and with interest rates likely to remain low until at least 2020, Berkeley could enjoy rising sale prices and high demand for its properties. In fact, in the current year its bottom line is forecast to rise by a whopping 51%.

Despite this positive outlook, Berkeley trades on a P/E ratio of less than nine, which appears to be difficult to justify even when housebuilders are generally trading at discounts to the wider index. As such, and while its shares have already risen by 32% in the last year, more gains are on the horizon for Berkeley.

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Peter Stephens owns shares of Aberdeen Asset Management, Berkeley Group Holdings, and BHP Billiton. The Motley Fool UK has recommended Aberdeen Asset Management and Berkeley Group Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.