The price of Eurasia mining (USA) shares has increased by 43%. Is it time to buy this penny?

During last year, Penny Share Eurasia mining (LSE: USA) has increased by 43% in price. But it is still sold for less than 3p each.

The past price action is not necessarily an indication of what can come in the future.

Even so, it makes me ask me: Should I add sharing to my portfolio?

Taking long -term view

As a long -term investor, my reaction to see that impressive one -year performance is to wonder how typical it is of the longest trend, and what if something can change that trend.

For five years, the price of the action has sunk 27%.

Even that number does not capture the complete story, since during that period the price really touched 40p. Therefore, some investors today could be sitting in a loss of paper much higher (or real) than 27%.

The catalyst for the growing price in the last 12 months, including an increase of 82% since the end of May, has been the continuous question of whether losses can download its Russian assets and, if so, if you could get a good price For them.

On the way last year, he issued new shares as part of a commercial financing agreement. Given the financial position of the company (net cash outings in the first half were £ 1.2 million), I see the risk of greater dilution of shareholders in the future if Eurasia needs to further reinforce liquidity.

So what is the latest news of a possible sale?

It is still a wait and see, with the company repeatedly emphasizing last year that there is no guarantee of any sale in the future.

Invest, not speculate

Here, I think, is where being an investor, not a speculator, helps me make a clear decision quickly.

Warren Buffett asks (in general, not specific to Eurasia) why someone might want to buy an action if it is not attracted to the idea of ​​owning the entire company.

Eurasia has a market capitalization of £ 72 million. But the company did not have a turnover in the first half of last year, it is consistently the loss of losses and its key assets (in Russia) are basically stranded in a geopolitical quagger on which it has limited control, if any.

I would like to buy that company in general, much less for £ 72 million? No. absolutely not.

So, do I want to buy an US action at today's price, or almost any price? NO again.

That does not mean that this cannot be a very lucrative opportunity. If Eurasia can download your assets at a good price, I think the price of the shares could be fired even from where it is currently. Keep in mind that the price of 40p, only a few years ago, enough buyers and shareholders felt that it was justifiable to make it come true.

But buying today in the uncertain perspective of an asset sale is too speculative to me.

Financial and commercial speculators with a radically different risk appetite could do it very well here (or very badly) at some point. However, as a investor, I will not join them.