Red Flags For Orsus Xelent

Many thanks to everybody who responded by e-mail or on our blog to last week’s appeal: “Do you have an idea why Orsus Xelent (ORS – $0.72) is trading at such a low P/E?”.

Most answers were unanimous and something like: management (CEO, CFO and several members of the board) and the Company’s auditor has changed during the last few quarters, revenues are declining and receivables are very high and rising.

Basically, investors don’t trust the situation as there are too many uncertainties. And if there’s one thing stocks can do without it’s uncertainties.

Based on this information and the fears that surround the Company, we decided to give ORS one more quarter to get its act together. If another red flag is added in the meantime, we’re recommending to sell our remaining position. If however they’re able to show signs of improvement in one or two areas, we’ll keep them in the portfolio a while longer.