Insurance leviathan Aviva (LSE: AV) emerged as one of the FTSE 100’s (INDEXFTSE: UKX) biggest winners in August, the stock adding 10% in value during the month.

And on paper Aviva still appears grossly undervalued. The firm’s forward P/E rating of 9.9 times is in line with the benchmark of 10 times indicative of ‘bargain basement’ stocks. Meanwhile, Aviva also carries a gigantic dividend yield of 5.3% for 2016.

The company advised last month that operating profit galloped 13% higher during January-June, to £1.33bn, helped by another solid return on its core UK operations — new business values here rose 8% during the half, to £280m.

But Aviva could see business levels at home decline sharply looking down the line as Britain’s decision to exit the European Union bites. On top of this, Aviva also has some work ahead of it to turn around struggling overseas units such as those in Asia. I believe the financial play remains a risk too far despite its ‘cheap’ valuation.

Safe as houses

Receding fears over the robustness of the British housing sector helped shove Barratt Developments’ (LSE: BDEV) share price 13% higher during August.

The result of June’s EU referendum on home sales is already being felt, with the Bank of England advising this week that mortgage approvals fell to their lowest for 18 months in July as buyer appetite cooled.

But Barratt remains in the box seat for robust long-term earnings growth. The successive failure of British governments to build houses should continue to support property prices in the years to come. And the likelihood of low interest rates lasting well into the future should prevent property sales from falling off a cliff.

I reckon now represents a great time to stock up on Barratt, the business currently dealing on a P/E rating of 9.3 times for 2016 and carrying a 6% dividend yield, far above the FTSE 100 average of 3.5%.

Bank in bother

Barclays (LSE: BARC) also punched robust gains during summer’s final month, the banking giant rising 12% in value in August.

But unlike Barratt, I don’t believe Barclays can be considered irresistible value at present. A prospective P/E ratio of 15 times is in line with the FTSE 100 average, and fails to reflect the multitude of risks facing the bank, in my opinion. And a dividend yield of 1.7% is unlikely to excite income chasers.

The probability of ultra-low interest rates lasting well into the future, weak sterling, and a possible cooling at its British retail banking division as the domestic economy slows, is likely to hamper Barclays’ ability to bounce into the black. And the bank’s decision to hive off emerging market assets could significantly hamper earnings expansion in the longer term.

And Barclays also faces a seemingly-endless roll of misconduct charges too. Just today reports emerged that a lawsuit has been filed by PCP Partners Capital, which alleges that the bank lent $3bn to Qatari investors to purchase Barclays shares back in 2008.

I believe risk-averse investors should steer well clear of Barclays at the present time.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.