5. Orsus Xelent Technologies (ORS)
Company Profile: Orsus Xelent is a China-based company that designs and manufactures economically priced cellular phones for retail and wholesale distribution.Orsus Xelent instituted a 12-for-1 reverse stock split in April to artificially boost its share price from 10 cents to $1.20. By early June, shares rallied sharply higher to a 52-week high of $7.29 in the absence of any company-specific news. The surge was particularly surprising as many other Chinese stocks -- most notably of companies created through reverse mergers -- are flagging due to frequent accounting scandals and intense scrutiny from the Securities and Exchange Commission. Orsus Xelent was formed via reverse merger in March 2005. Earlier this month, Reuters reported that Orsus Xelent had inaccuracies on its Web site regarding contact info and quoted the company's chief financial officer as being in the dark on why the share price had appreciated so rapidly. "We've gotten calls about the price, but we don't have any idea why the price is so unusual," Orsus Xelent CFO Chen Hua told Reuters. "But I don't pay attention to the trading volume or the stock price." Current Share Price: $4.87 (June 27) 2011 Total Return: 138% Analyst Ratings: There are no research firms covering Orsus Xelent currently. TheStreet Ratings has a "sell" rating on the stock, which it has maintained for more than a year. The latest report highlights Orsus Xelent's "feeble growth in its earnings per share, deteriorating net income, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."
4. Star Scientific (CIGX) Company Profile: Star Scientific develops dissolvable smokeless tobacco products, which are billed as delivering fewer carcinogenic toxins. Shares of Star Scientific began surging in March on reports that compound RCP-006, which the company says is a "nutritional supplement," has potential in treating Alzheimer's. TheStreet's Adam Feuerstein notes that RCP-006, also known as anatabine, "might one day be a cure for Alzheimer's, but it's very premature to make such a claim since this nutritional supplement (not even a drug) has not yet been tested in humans, let alone humans with Alzheimer's." That skepticism hasn't kept the shares from rising. The stock did take a hit in April before the Food and Drug Administration said it will regulate smokeless electronic cigarettes as it does with traditional tobacco products. Shares are now near their all-time high. Current Share Price: $4.96 (June 27) 2011 Total Return: 154% Analyst Ratings: No research analyst follows Star Scientific. TheStreet Ratings does not have a rating on the stock.