Despite gloom in the broader stock market, software and entertainment shares outperformed at a steady pace this year, suggesting that investors have yet to discover value in select stocks on the Seoul bourse.

Price-to-earnings ratios, a key yardstick for measuring stock’s valuation, reached 26 for software shares and 18 for the entertainment segment, financial data provider FnGuide showed on Monday.

The high PER raises the question of whether those shares are overpriced at a time when the country’s stock market has suffered from steep losses amid growing worries over spreading debt woes in Europe and the slowing economy of the United States.

The game and software sector is led by Neowiz Games, NCsoft and Wemade. One prominent player in the entertainment sector is S.M. Entertainment, whose PER shot to 43.

Given that the average PER for Korean shipbuilding and chemical industries hovers at 7 and that for its semiconductor equipment stands at about 10, the software and content business players are enjoying far better PER, helped largely by the fast-paced shift from hardware toward software in the global IT sector this year.

Stock prices for the companies in the two high-flying sectors mostly climbed, outperforming other players in the market. A mobile game provider Com2us saw its share price jump 178 percent this year. Neowiz, a gaming leader, shares also soared 57 percent. NCsoft, which dominates the domestic gaming industry, rose 49 percent.

S.M. Entertainment, which was traded at 16,900 won late last year, surpassed the 47,000 won level, staging an increase of about 180 percent.

The blue chip-studded KOSPI, meanwhile, slid 14.2 percent during the period.

The strong share prices of game firms and entertainment companies are largely buttressed by institutional investors. SK C&C, NCsoft and Com2us all attracted massive buy orders from institutional investors in the past months.

Even the country’s pension fund bought shares in S.M. Entertainment. The National Pension Service raised its stake to 6.24 percent, becoming the fourth-largest shareholder in the firm behind Asia-wide hit music groups such as Girls’ Generation.

But analysts warned that the popularity of entertainment and software shares might be overhyped.

“Although software and entertainment businesses show faster growth momentum, it remains unlikely that they can continue to pull off such high growth in the long term,” said Kim Se-joong, chief analyst at Shinyoung Securities.

By Yang Sung-jin (insight@heraldcorp.com)