Is it time to ride the rails? In Gordon Pape's The Internet Wealth Builder, analyst Tom Slee reaffirms his buy rating on Burlington Northern Santa Fe (NYSE: BNI), his top pick in the sector.

"Burlington Northern is my preferred choice in the railroad industry. At first glance, Burlington Northern had a particularly bad first quarter.

"Profit was $0.86 a share, down sharply from $1.30 a share the year before. However, when unusual items such as an unfavourable coal rate decision are excluded, operating earnings amounted to a much more acceptable $1.13 a share, well above the 96c analysts were looking for.

After the airline went through bankruptcy twice, turnaround expert George Putnam now sees improving long-term prospects for US Airways (NYSE: LCC).

In his The Turnaround Letter, the advisor suggests, "When travel does begin to pick up again, US Air with its lean cost structure should profit handsomely." Here's his review.

"US Airways began in 1939 as All-American Airways delivering mail to Western Pennsylvania and the Ohio Valley; from there it grew through acquisitions to be a major national airline.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

"Fluor (NYSE: FLR), my top pick for 2009, is a global heavyweight in the engineering, procurement, construction and maintenance field," says noted value investor Nathan Slaughter.

The editor of Half-Priced Stocks explains, "2008 won't go down as one of the most memorable for Fluor shareholders -- but 2009 is likely to tell a different story.

"Texas-based Fluor began by building oil refineries over a century ago and has since expanded its repertoire to encompass other specialties including power, telecommunications, and transportation. Annual revenues are now $20 billion.

"In early December, President-elect Obama unveiled ambitious plans for a hefty economic stimulus package, spearheaded by a pledge to rebuild highways and complete other public works projects that will revitalize our aging infrastructure.

"These bold initiatives are aimed at putting workers back on the payrolls and reinvigorating the nation's economy -- but they will also funnel billions into the coffers of construction firms like Fluor.

"It's hard to find any good news these days but I was pleasantly surprised with the third-quarter railway results, as almost all of the 'class 1 carriers' reported better than expected earnings," notes analyst Tom Slee.

The contributing editor to Gordon Pape's Internet Wealth Builder explains, "Several rail stocks are starting to look attractive at these depressed levels and Burlington Northern (NYSE: BNI) remains my preferred choice in the group." Here's his outlook.

"Even with the economic downturn starting to bite, reduced fuel costs and increased freight rates offset lower volumes. Equally important, the companies remain cautiously optimistic despite the miserable outlook.

"They are confident that further freight rate price increases in the 4% to 5% range are sustainable and will still allow them to undercut inefficient truckers.

"Unfortunately, none of this prevented the stocks from being battered during the market collapse. However, I think that fourth-quarter profits are likely to remain strong and the longer term outlook for railroads remains favorable.

"Burlington Northern continues to power ahead. A shrinking economy must eventually take its toll but there was no sign of any weakness in BNI's third-quarter results. Operating earnings came in at $1.91 a share, up 29% from $1.48 in 2007.

"If there's one sector that stands to benefit handsomely from a further slide in oil or, at least, a moderation in crude's rally: the airlines," explains energy sector expert Elliott Gue.

In The Energy Strategist, he says, "Airlines may make a terrible long-term investment but can be an outstanding short-term trade." Here he looks at Delta Air Lines (NYSE: DAL) and, for the even more speculatively-inclined, US Airways (NYSE: LCC).

"Some investors will rightfully cringe from any mention of this sector; after all, the airlines have consistently lost money throughout their post-deregulation history.

"Most of the majors have declared bankruptcy on multiple occasions since that time. However, we've traded the airlines on a few occasions; we took some triple-digit percentage gains in the airlines back in 2005.

"The airlines' leverage to oil prices is well known. Expectations are so low, in fact, that several major air carriers actually managed to beat consensus expectations in the second quarter.

"And although sentiment is already at rock-bottom, there's a real basis for cautious optimism. First, if I'm right about oil, fuel costs won't rise appreciably in the third quarter. This huge headwind is dissipating.

"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.

YRC Worldwide (Nasdaq: YRCW) is the largest U.S. operator of motor carriers that offer less-than-truckload freight services.

Just because a sector is down doesn't mean that there aren't opportunities within the business category. Trucking transport has been a sector under pressure, and with the above in mind, YRC Worldwide is worth a review.

Analysts expect road freight sector conditions to improve gradually in 2008, with a slight revenue increase for YRCW, on mild tonnage gains and some pricing power. Margins should also improve in 2008.

Longer term, analysts expect YRCW to improve operational performance via ongoing efforts to rightsize its fleet and eliminate operational overlaps. The Reuters F2008/F2009 EPS consensus estimates for YRCW are $1.64/$2.42.

To be sure, YRCW's stock carries considerable risk, but the argument here is that improved operations and a pull-back in average oil prices for 2008 to the 'low' $75-80-level will provide enough tailwind to improve bottom-line results. Those facts, combined with a p/e of 8 make the YRCW risk/return favorable.

The risks? A U.S. recession would (obviously) hurt YRCW's results. Analysts also have an eye on the company's pension costs.

The First Call mean rating for YRCW is: Hold. [13 firms.] Mean 2008 target: $18.00. [high: $25, low: $15.]

Stock Analysis: YRC Worldwide is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from YRCW's shares. Sell / Stop Loss if you were to purchase shares in this company: $8.

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.

"The commodity bull is awakening," says Curtis Hesler, editor of the Professional Timing Service. The advisor, who focuses on long-term market cycles, explains, "We have been through a long stretch where everything, including gold mining stocks and oil issues, have gone up and down in tandem with the movements in the popular averages (Nasdaq, Dow, S&P 500, etc.).

"We are going to enter a phase now and through 2008 where this will no longer be the case. Next year looks like it will be a very profitable year for commodity-related (real asset) issues, but dismal for financial (paper) assets.

"I am looking for $100.00 crude oil (as well as a move to $850 in gold). This should be the basis for your strategy. The commodity bull will thrive in 2008 at the expense of the general market, and the weak dollar will be no small reason for this.