If rail freight numbers are a good economic indicator, and in my experience they are, then the railroads are sending a very strong message right now. That message, in it's simplest form, says that our national economy is rebounding nicely from last year's low ebb, but we've not yet moved into what could be termed a substantial recovery.

The Association of American Railroads (AAR) latest traffic report paints a fairly bright, yet cautious, picture. Carload freight volume is above 2009 levels for the sixth straight week over last year, and intermodal freight volume (shipping containers and semi trailers loaded on train cars) is above 2009 levels for the twelfth straight week. Total freight volume for the week ending April 3, 2010 was estimated at 31.3 billion ton-miles. This represents an 11% increase over the same week in 2009, but still represents a decrease of 9.3% when compared to the same week in 2008.

Rail carloadings for agriculture and coal are down, as is containerized trade traffic, and the near-term does not look bright, but you'd never know it from Burlington Northern Santa Fe's stock price trend.

Institutional investors have bid-up shares in anticipation of U.S./global recoveries. Therefore, I'm reiterating my Buy rating for Burlington Northern (NYSE: BNI), first recommended on April 30, 2009 at a price of $67.81. However, there is caveat: wait for a pull-back to about $75, and hope the market gives you the chance at a decent entry point.

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.

To say the bears on Wall Street have gained some momentum in late November 2007 would be an understatement.

The consensus now argues that U.S. GDP growth has slowed substantially, with growth likely to remain sub-par through at least June 2008, and the Dow's 1,400-point drop in about a month reflecting that consensus.

Nearly every sector looks vulnerable. Still, some sectors are faring reasonably well. The rails are one, and among the rails, Burlington Northern (NYSE: BNI) is worth an evaluation.

For nearly 30 years, the rails -- long neglected in the United States -- were considered passé. Then the globalization era dawned, along with its exports and demand for agricultural products and coal. Add intermodal shipments and a price of oil that's basically risen for ten years and the results is - the rails are back.