Rediff.com - the next Google?

Today when I woke up and started my daily routine - watching CNBC - I was startled. I saw Rediff.com (Symbol REDF) shares up more than 20%. I hurriedly started my computer and checked what was going on. I know for sure there were no earnings cause they just reported last month. So there was something else. To my surprise it was Cramer! Yesterday Cramer highlighted the Indian web portal company. To quote Cramer - "(Rediff.com) may even be the Indian Google".

Now that is insane I thought. The guy has become so popluar that any stock that he recommends the day before goes up at least 5% easily the next day (take the case of ZOLT). That makes me feel uncomfortable. It means too many amatures are watching his show and blindly believing him. Not to say that Rediff has problems. Cramer has lot of people behind him doing good research. Only after a company passes that does Cramer comes and trumpets it on his show. But a stock jumping so much just because he called shots for it is discomforting. I feel all those people who do that are just plain foolish. They might get burnt hard.

A few things about Rediff. My opinion about Rediff is that this is a very good company. It has just turned profitable and it is poised for excellent growth. I don't think it is the Google of India as Cramer put it. I use the site. And it is not the best site that is out there. But it is used by a lot of Indians - most of my friends use it pretty regularly and from their feedback it is a really useful site. No doubt it is one of the most popular site in India. I had already mentioned the stock in one of my previous posts. My guess is the stock can easily hit $40 by the end of the year. But before it does that, it has to show good earnings.

So how should you play this one. I think if you are not into it already then better wait. Don't go with Cramer mania. The earnings are quite far and the stock may settle down a bit. I think 15-18 is a good range to enter the stock. But your best bet is to wait till the earnings. If the earnings are solid - buy it at whatever price you get. You will be in good shape.