Canadian National Railway (CNI), which I first wrote about on July 30, 2009, at a price of $47.95, is making a bee-line to $80, and if you haven't already, now may be a good time to consider taking some profits with CNI if you're in near $48.

However, investors who can tolerate the risk can maintain their full CNI position, but keep in mind the journey to $90 may not be completed in 2011.

CNI remains one of best run railroads, bolstered by rigorous cost controls, Look for Canadian National's 2011 revenue to rise 8% to 10%, after a 20% to 25% surge in 2010, as both goods shipment and commodity transport recover; margins will likely increase this year, as well. Volumes also should rise 5% to 7% in 2011, after a double-digit gain in 2010.

"Once written off as a 'sunset' industry, North American railroads are making money hand over fist. In short, the railways are benefiting from a rising tide and the companies have a lot going for them," notes Canadian analyst Tom Slee.

The contributing editor with Internet Wealth Builder explains, "Here's a look at my newest recommendation, Canadian Pacific Railway (CP), as well as my long-time favorite, Canadian National Railway (CNI).

"Last year the six major carriers posted a 45% average growth in earnings as they booked increased volumes and increased rates.

Canadian National Railway (CNI), which I first wrote about on July 30, 2009 at a price of $47.95, appears set to test $70, and if you haven't already, now may be a good time to consider taking some profits with CNI if you're in at/near $48.

However, investors who can tolerate the risk can maintain their full CNI position, but keep in mind that the journey to $80 may not be completed in 2011.

CNI remains one of best run railroads, bolstered by rigorous cost controls, Look for Canadian National's 2011 revenue to rise 8-10%, after a likely 20-25% surge in 2010, as both goods shipment and commodity transport recover; margins will likely increase in 2010, as well. Volumes also should rise 5-7% in 2011, after a double-digit gain in 2010.

Analyst Upgrades

• Micron (MU) to buy from neutral at UBS.
• Baker Hughes (BHI) to outperform from market perform at BMO Capital.
• PDL BioPharma (PDLI) to outperform from sector perform at RBC Capital.
• Fluor (FLR) and Rush Enterprises (RUSHA) to buy from neutral at BofA/Merrill.
• Camden Property (CPT) to outperform from neutral at Macquarie.
• Pinnacle Financial (PNFP) to buy from hold at Wunderlich.
• Linear Technology (LLTC) to neutral from reduce at Nomura.
• Hologic (HOLX) and Illumina (ILMN) to buy from hold at Citigroup.
• F5 Networks (FFIV) to buy from neutral at Gleacher.

Analyst Upgrades

• Dominion (D) to buy from hold at Deutsche Bank.
• Corinthian Colleges (COCO) to outperform from underperform at RBC Capital.
• Canadian National (CNI) to sector outperformer from sector performer at CIBC.
• DragonWave (DRWI) to buy from hold at Jefferies.
• Infosys (INFY) to overweight from equal weight at Morgan Stanley.
• SL Green Realty (SLG), Lexington Realty (LXP) and Taubman Centers (TCO) to overweight from neutral at JPMorgan.
• Sunstone Hotel (SHO) to buy from neutral and Extra Space Storage (EXR) to buy from hold at KeyBanc.

If you viewed the summer dip in Canadian National Railway (CNI), which I first wrote about on July 30, 2009 at a price of $47.95, as a chance to scoop-up shares, you made the correct move, as CNI has since accelerated to move above $64.

CNI remains one of the best-run railroads, bolstered by rigorous cost controls. Look for Canadian National's 2010 revenue to jump 18-25% and 5-8% in 2011, as both goods shipment and commodity transport recover; margins will likely increase this year, as well. Volumes also should rise at a double-digit rate in 2010.

Analyst Upgrades

• BB&T (BBT) was upgraded to buy from neutral at Janney Montgomery.
• Amylin (AMLN) was upgraded to outperform from market perform at Leerink.
• Wells Fargo upgraded Morton's Restaurant (MRT) to outperform from market perform.
• Check Point (CHKP) was upgraded to overweight from neutral at HSBC.
• Deutsche Bank upgraded Excel Maritime (EXM) to buy from hold.
• JinkoSolar (JKS) was upgraded to buy from hold at Auriga.
• Piper Jaffray upgraded Compellent (CML) to overweight from neutral.
• BofA/Merrill upgraded Crane (CR) to buy from neutral.
• Goldman upgraded Wisconsin Energy (WEC) to conviction buy from buy and American Electric (AEP) to buy from neutral.
• Motorola (MOT) was upgraded due to increasing carrier support by MKM Partners.
• Under Armour (UA) was upgraded to buy from neutral at Sterne Agee.

Canada stocks and Canadian investments are coming into favor, as the specter of inflation rears its ugly head and the fate of the recovery is anything but certain. That's because Canada's financial system is stable, it is rich with natural resources, and it can keep plugging along even if consumers don't open up their wallets again anytime soon.That means Canadian stocks could be big in 2011.

Analyst Upgrades

• GC Financial upgraded Microsoft (MSFT) to buy from hold, citing expectations that the company will raise its quarterly dividend by 15%. The firm upped its target for shares to $30 from $29.
• JPMorgan upgraded Agrium (AGU) to overweight from neutral, citing valuation and strengthening agricultural fundamentals. The firm raised its target for shares to $75 from $70. Note JPMorgan downgraded Mosaic (MOS) this morning to neutral from overweight.
• Susquehanna upgraded Baker Hughes (BHI) to positive from neutral based on valuation. The firm has a $53 target on the stock.
• Target (TGT) was upgraded to buy from neutral at BofA/Merrill.
• CF Industries (CF) was upgraded to conviction buy from neutral at Goldman.
• Portugal Telecom (PT) was upgraded to buy from hold at Deutsche Bank.

The shares of Canadian National Railway (CNI), first discussed on July 30, 2009 at a price of $47.95, have pulled-back roughly in-sync with the Dow's recent retreat, but just look on that dip as an extended opportunity to scoop-up shares of a quality railroad. Here's why:

As noted earlier, look for the rails to play a pivotal role in both containerized and commodity transport, moving forward, with a cost advantage over trucking, particularly if oil's price remains elevated. And with oil trading in a $70-80 range, oil's price qualifies as elevated, no question.

Analyst upgrades:

• UBS upgraded Salesforce.com (CRM) to Buy from Neutral based on positive feedback on the Chatter product and increasing confidence the company can beat FY11 guidance. The firm raised its price target to $111 from $90.
• Leerink upgraded Vivus (VVUS) to Outperform from Market Perform. The firm believes Qnexa issues raised by the FDA are labeling and marketing issues, and not approval issues. The firm expects a positive panel vote for Qnexa.
• Goldman upgraded AK Steel (AKS) to Buy from Netural citing lower iron ore prices. The firm has a $17 price target on the stock.
• Kinder Morgan Energy (KMP) was upgraded to Equal Weight at Morgan Stanley.
• Shire (SHPGY) was upgraded to Outperform from Neutral at Credit Suisse.
• Canadian National (CNI) was upgraded to Outperform from Market Perform at Raymond James.

Analyst Upgrades

• JPMorgan upgraded Norfolk Southern (NSC) to overweight from neutral, citing the company's leverage to coal and position relative to peers. The firm has a $68 price target for shares.
• Benchmark upgraded Royal Dutch Shell (RDS.A) to hold from sell based on a more favorable earnings outlook and reduced dividend risk.
• UBS upgraded Costco (COST) to buy from neutral based on valuation. The firm raised its price target to $63 from $62.
• Visa (V) was upgraded to gonviction buy from buy at Goldman.
• KLA-Tencor (KLAC) was upgraded to outperform from neutral at Credit Suisse.
• Texas Instruments (TXN) was upgraded to outperform from perform at Oppenheimer.

Last chance to board the Canadian National Railway (CNI), which I first wrote about on July 30, 2009 at a price of $47.95.

As noted last year, the rails will play a pivotal role in both containerized and commodity transport, moving forward, with a cost advantage over trucking, particularly if oil prices remain elevated. And with oil trading at about $85 per barrel and trending toward $90, oil's price qualifies as elevated, no question.

"One of the first things I learned in this business was to keep an eye on the Dow Jones Transportation Index. Often referred to as the 'Canary in the Coalmine', it's one of the few worthwhile market indicators," suggests Tom Slee.

The contributing analyst with Internet Wealth Builder explains, "An upward movement in the Dow Industrials is only sustainable if confirmed by the Transports. As traders say, one 'makes', one 'takes'. Further, the Transports have led every major rally since 2004. So with our canary alive and well, I remain very encouraged."

The rails will play a pivotal role in both containerized and commodity transport, moving forward, with a cost advantage over trucking, particularly if oil prices remain elevated. But will oil prices moderate in 2010? As they say in The Bronx, N.Y. 'Good luck waiting for that one to happen!' And that's a big reason I'm reiterating my buy rating for Canadian National Railway (CNI), first recommended on July 30, 2009 at a price of $47.95.

CNI's long-term valuation story remains intact: look for 5-8% revenue growth in FY2010, as both goods shipment and commodity transport recover; margins will likely increase this year, as well.