Readers of this space know that the railroad sector is one of the preferred sectors. After decades of unconscionable neglect, U.S. railroads are experiencing a resurgence, propelled by international trade and the rail's cost advantage over truck transport. But as one knows, trains don't always roll, sometimes they have to brake to stop, and that's where Westinghouse Air Brake Technology makes its money.

Westinghouse Air Brake Technologies (NYSE: WAB), known as Wabtec, manufactures braking equipment and other parts for locomotives, freight cars, and passenger rail cars.

Products of Wabtec's freight group include air brake systems, draft gears, hand brakes, slack adjusters, heat exchanges, railroad electronics, and monitoring and control equipment. The company also builds new locomotives up to 4,000 horsepower and provides aftermarket services, including locomotive and freight car fleet maintenance.

Analysts expect strong, double-digit revenue growth on solid back-orders and new business. Analysts also like Wabtec's blue-chip clientele, decent pricing power, demonstrated ability to deliver products and services on time, and reasonable cost structure. The Reuters F2008/F2009 EPS consensus estimates for WAB are $2.53/$2.81.

Further, as noted, Wabtec is in the right business at the right time. Train transport's competitive advantage on cost versus truck transport is improving. One energy model suggests oil/diesel prices will moderate amid a U.S. and global economic slowdown. Another model suggests that may not be the case, if emerging market demand for oil continues to increase at dizzying rates. If the latter prevails, WAB's promising future will remain intact for quite some time.

The risks? Wabtec (obviously) remains vulnerable to substantial slowdowns in the U.S. and global economies, or a sustained decline in oil to $40-50 per barrel. Don't look for the latter anytime soon.

The First Call mean rating for WAB is: Strong Buy [8 firms]. Mean 2008 target is $44 [high: $51, low: $30].

Stock Analysis: Westinghouse Air Brake Technologies is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from WAB's shares. Sell/Stop Loss if you were to purchase shares in this company: $22.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.