Below is the excerpted article from the Korea Herald.
Food and beverage companies pep up investors
The right choice of food and drink is an investment to one's health. It can also be a healthy stock investment, analysts say, especially amid the hazy economic outlook.
"The valuation of food and beverage companies is going up based on their stable earnings, whereas the earnings visibility is not good for the information and technology sector," said Lee Eui-sup, an analyst at Samsung Securities Co. "Investors' interest is shifting from information-technology stocks to food companies but investors should look at it case by case."
Analysts recommend two growing and profitable companies: Nong Shim Co., the nation's largest maker of "ramen," or instant noodle, and CJ Corp., a leading food processing company.
They say that with the ongoing weak economy, these two food companies boast a strong market position that translates into stable earnings and high growth potential.
"These companies are attractive because they not only have a big market share but also have a stable inflow of revenue and a long-term advantage by specializing in one of the basic necessities," said Kim Ji-whan, an analyst at Hyundai Securities Co.
CJ Corp., another popular investor's choice, is also a growth story.
"CJ is attracting investors for its stable profits," said Kim Ji-whan of Hyundai Securities.
"The bad economic condition could be an entry barrier for companies, yet these food and beverage companies continue to expand its market share," said Song Ji-hyun, an analyst at Goodmorning Shinhan Securities Co.
No matter what the state of the economy, people must eat and drink. In a weak economy, so-called defense stocks like food and beverage and pharmaceutical equities increasingly gain favor.