2 FTSE 250 stocks I'd sell in June

Shares of LondonMetric Property(LSE: LMP) have been hitting new all-time highs this month. The company, which released its annual results this morning, was formed by the merger of Metric and London & Stamford in 2013 and the combined group has provided investors with a five-year annualised total return of 15.2%, compared with 6.8% for the FTSE 100.

The directors are property veterans and the company is focused on "sectors supported by structural changes in shopping habits," notably the digital revolution. In today's results, management said retail distribution assets now represent 69% of the portfolio, compared with 21% in 2013.

Unemotional

LondonMetric reported an uplift in EPRA net asset value (NAV) per share of 10.3% on last year to 165.2p. EPRA earnings per share (EPS) increased 3.7% to 8.5p and the board lifted the dividend by 5.3% to 7.9p.

The share price is 192p, so the shares are trading at a 16.2% premium to NAV. Put another way, if you're investing at the current price, you're having to pay £1 for every 86p worth of assets. Meanwhile, the price-to-earnings (P/E) ratio is 22.6 and the dividend yield is 4.1%.

I believe LondonMetric's valuation is too rich. Just as management is unemotional about its property portfolio and sells and recycles the capital if an asset no longer justifies continued ownership, I see now as a good time to sell the company's shares and recycle the capital into a stock with better value credentials in terms of NAV, P/E and dividend yield.

Contrarian corker?

Jupiter Fund Management(LSE: JUP) has delivered a five-year annualised total return of 11.2% for investors. And this despite a recent share price decline from an all-time high of 631p in the first week of January to around 450p today.

My Foolish colleague Harvey Jones believes this looks like a buying opportunity and fellow Fool Royston Wild is equally enthused by what he reckons could be a contrarian corker. At the current share price, underlying EPS of 34.2p gives a trailing P/E of 13.2, while the running dividend yield is 7.2%, based on a 17.1p ordinary dividend and 15.5p special. On the face of it, the valuation is not unattractive, even with City forecasts of dips in EPS and dividends this year. These raise the P/E to 13.4 and reduce the yield to 6.6%.

Stage of the cycle

Jupiter's flagship Dynamic and Strategic bond funds have been hugely popular after a 30-year bull run in fixed income and the fund house has also enjoyed the nine-year bull run in equities, driven by the asset-price-inflating policies of governments and central banks.

However, investors drew a net £1.3bn out of the group's funds in Q1 this year and I fear this is a bad stage in the cycle to be investing in Jupiter. Bull runs don't last forever and sooner or later the company will likely be hit with brutal EPS and dividend downgrades. On the basis that it could well be sooner rather than later, this is a stock I'd be happy to sell at this time.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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