"Railroads are a play on three big secular themes: the drive for increased energy efficiency, growth in coal and the agriculture boom," says Elliott Gue, a energy sector expert who has just returned from Japan where he was covering the G8 Summit.

Meanwhile, in his The Energy Srategist, he states, "Railroads are now among the most fuel-efficient forms of freight transport available." Here, he offers a bullish review of Union Pacific (NYSE: UNP).

"My long-held thesis on the group has been that the railroads are no longer totally dependent on the US economy for their growth.

"It's no longer appropriate to look at this sector as viciously economy sensitive. The traditional relationship between the broader market and the rails has been breaking down for several years, but this trend appears to be accelerating.

"In 2007, according to the Association of American Railroads (AAR), the average railroad moved a ton of freight a distance of 436 miles on a single gallon of diesel fuel. That makes freight trains roughly three to four times more fuel efficient than trucks.

"Union Pacific is the largest railroad in the US and has long been one of my favorites. The company's network is nearly 33,000 miles long and is concentrated in the West and Midwest. It also offers a convenient example of the bullish forces at work for the rails, particularly in the coal and agriculture industries.

"The railroad sector is one of the few reliable groups in today's market; with solid pricing power, these companies have a solid future moving forward," says contrarian Chris Johnson.

"We are adding CSX Corp. (NYSE: CSX) as a long position to the Insightful Investor portfolio. Here's his look at the stock, and an options play for those seeking leverage.

"Last week, our Earnings Tip Sheet highlighted CSX as a bullish pick ahead of earnings. The stock was positioned for a jump according to our Behavioral Valuation approach. One week and a positive earnings report later, we're looking to increase our exposure to the company.

"CSX has now reported earnings results that handily beat both the analyst forecast and the whisper number. The company overcame softness in some sectors through increased shipments in ethanol and grain as well as increased foreign demand for coal.

"Rail companies appear strong moving forward, given that rising crude oil prices are forcing companies to use more cost-efficient means to ship their goods.

"What's more, CSX was the first of the 'big four' rail companies to report earnings. The company should thus benefit from positive reports when its competitors enter the earnings confessional.

With Warren Buffett in the news recently, it is timely to look at a recent report from Paul Tracy, highlighting some of the best-positioned stocks currently held by Berkshire Hathaway (NYSE: BRK.A) -- Burlington Northern Santa Fe (NYSE: BNI) and WABCO Holdings (NYSE: WBC).

Here, the editor of StreetAuthority Market Advisor explains, "Buffett looks for such factors as intrinsic value, low debt, managerial expertise, a margin of safety and an 'economic moats' that offers some sort of sustainable competitive advantage." Here's a pair of transportation stocks that fit the bill.

"While many investors fret over the current volatility in the stock market, Warren Buffett is likely busy looking for value. Historically, in volatile up and down markets, Buffett has found even more opportunities than in raging bull markets."

"Burlington Northern Santa Fe is the second-largest railroad in the U.S. Berkshire holds an 18.2% stake in BNI, recently boosting that stake by purchasing 11 million shares to bring its total ownership to more than 63 million shares. Buffett has made no secret of his desire to purchase more of the stock.

"The key to discerning competitive advantages between the major railroad firms lies in the strategic location
of their networks. Specifically, BNI has the largest network of track in a region of the western U.S.
known as the Powder River Basin, which is home to America's largest reserves of coal.