Three Picks from Cramer's Dec. 4 Lightning Round.

Dr. Osman is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

CNBC's Mad Money takes viewers into the mind of one of Wall Street's most respected money managers, Jim Cramer. Cramer presents all manner of investment advice in a unique style. During the Lighting Round, Cramer accepts viewers' challenges and comments on several stocks. He only needs a few seconds to decide on a “buy” or “sell” rating. However, as he says, we should never invest without doing our homework. Here, I review three stocks discussed on the Dec. 4 Lightning Round.

First on the list is Ford (NYSE: F). Cramer prefers Ford over Toyota, and I think that, at the current price levels, Ford could offer a significant value opportunity. Its valuation metrics are quite desirable, especially when compared to the industry's same variables. The stock is trading 2.6 times trailing earnings and almost 11 times free cash flow. In addition, it is trading with a 68% discount to sales and a PEG ratio below the norm of one. Return on equity figures stand at over 140%, highlighting the company's ability to generate profit. Moreover, analyst's mean target price of $14.67 suggests an almost 28% upside potential.

For 2011, Ford claimed a 16.5% market share in the United States and 8.3% in Europe. Its market penetration has seen a slight deterioration over the past five years mainly due to tight demand conditions. Nevertheless, the leading automaker expects to reverse its market share losses with its new products, including the Escape sport-utility vehicle and the mid-size Fusion sedan. Third quarter 2012 financial results were robust overall, underlined by a strong operating performance. Total Automotive pre-tax profit was $1.8 billion, an increase of $436 million compared to the same period in 2011. Ford North America achieved its highest quarterly profit and operating margin since 2000. As of November 2012, Ford China sales were up by 56% on a year-to-date basis. For the full year of 2012, the firm projects positive operating cash flows to result from its competitive presence in the U.S., and its strong sales figures in Asia. Moreover, Ford expects its business transformation in Europe to help it counterbalance the current unfavorable market factors.

Cramer made a bullish call on The Coca-Cola Company (NYSE: KO). Out of twenty analysts tracked by Wall Street Journal, eight indicate a “hold rating” while ten suggest it is worth buying. EPS this year followed a downward trail of over 27%. Nevertheless, throughout 2012, the stock performed nicely and returned about 13%. In addition, for 2013, EPS is estimated to increase by a satisfying 9.50%, enhancing the company's growth prospects.

The firm's wide economic moat is supported by its extensive distribution network and its diverse product portfolio. Coca-Cola's portfolio features $15 billion brands of nonalcoholic beverages, which are distributed in more than 200 countries. Consumers all over the world enjoy Coca-Cola's beverages at a rate of 1.8 billion servings a day. Over the last five years, the firm achieved a modest sales growth of around 14.1%. In the most recent earnings release, Coca-Cola reported overall strong worldwide volume growth. Sales volumes in the developed economies were hurt by lower-priced drinks.

Nevertheless, in the emerging markets, Coca-Cola claims the lion's share of revenues that bolstered growth the most. In particular, the company achieved quarterly growth of 19% in Thailand, and 15% in India. In an effort to enhance its competitive presence in the very promising emerging economies, the company decided to invest about $300 million in Vietnam. With a P/E ratio slightly above the industry's average, Coca-Cola might seem quite pricey at the moment. However, I do believe it is worth adding to your watchlist. Looking ahead, I expect Coca-Cola to benefit from its emerging market consumer exposure.

Last on the list is Kellogg Company (NYSE: K). Cramer thinks it is a “buy” primarily due to the company's consistent management efficiency. I would give it a “hold” rating mainly because, at current valuation metrics, I find it rather expensive. The stock is trading with a price-to-book value ratio of 8.3 while the industry's median stands at 4.6. Analysts' average mean target price of $55.81 indicates a possible 2% depreciation.

Founded in 1906, Kellogg is a leading global producer and marketer of ready-to-eat cereal and convenience food products. The company has operations in 17 countries and markets its products in more than 180 countries. Recently, Kellogg acquired the Pringles brand, which was, in fact, a profitable addition to its already extensive brand portfolio. The company's CEO said that the Pringles chips helped boost revenues for the third quarter of 2012. Overall, efficiency improvements and continuous investments in marketing could strengthen the company's operations in the long-term. However, for the short-term, I believe Kellogg's growth prospects are limited. Intense competition, as well as the current difficult operating environment, act as a significant barrier. Even though the company ended the third quarter of 2012 with increased net sales, operating income, as well as net income, remained flat. In addition, the balance sheet showed a $1.2 billion differential between current liabilities and current assets. Kellogg's debt-to-equity ratio is standing much higher than the industry's average, indicating substantial risk.

ecofinstat has no positions in the stocks mentioned above. The Motley Fool owns shares of Ford. Motley Fool newsletter services recommend Ford and The Coca-Cola Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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