CSX (CSX - Cramer's Take - Stockpickr - Rating) owns one of the largest rail networks in the U.S. It has been rated a buy since July 2005. The buy rating is based on the company's improving margins and shareholder returns, low debt levels and solid product pricing. Its revenue increased by 4.5% in the second quarter over the year-earlier period, and it has repurchased common stock worth $548 million as part of its $3 billion share repurchase plan. CSX also announced a 25% increase in its quarterly dividend. The company's strengths outweigh its subpar net income growth.

L-3 Communications Holdings (LLL - Cramer's Take - Stockpickr - Rating), a military-equipment company, has been rated a buy since July 2005. It recently reported that its second-quarter earnings nearly tripled compared with the same period last year. Higher defense spending worldwide, together with the company's recent acquisitions and a healthy backlog order book, encouraged management to raise guidance for fiscal 2007. L-3 Communications is expected to benefit from increased defense spending, as it is ranked among the top 10 biggest federal contractors. Also, higher security measures adopted by airports throughout the world will create new demand for L-3's baggage-screening systems and surveillance programs. The company's revenue could be impacted by the loss of key contracts in any of its business segments. Also, L-3's dependence on government spending and its strategy of growth through acquisitions could negatively affect the results.

Rated a buy since July 2005, Paccar (PCAR - Cramer's Take - Stockpickr - Rating) designs, manufactures and distributes light-, medium- and heavy-duty trucks and parts. The company's expansion plans, superior product lines and international focus should preserve its track record of delivering strong financial performance and returns to shareholders. Paccar generated shareholder return of over 35% in the first half of fiscal 2007 thanks to stock price appreciation, share repurchases and dividends. The company has repurchased around $350 million worth of stock over the past 18 months and still has about $279.70 million worth of shares left to be repurchased. This could further enhance its already superior return on equity going forward.

provides fixed-line telephony services in Mexico, the U.S. and numerous countries in Latin America. Its strengths are seen in its largely solid financial position with reasonable debt levels, expanding profit margins, revenue growth and a pattern of EPS growth over the past two years that is likely to continue. In the year ended August 2, Telefonos' stock price increased by 42.73%, and while almost any stock can fall in a broad market decline, it should continue to move higher. These strengths outweigh the company's weak operating cash flow.

Railroad operator Union Pacific (UNP - Cramer's Take - Stockpickr - Rating) has chugged along with a buy rating since July 2005. The company recently joined with Norfolk Southern Railway (NSC - Cramer's Take - Stockpickr - Rating) to launch a new service that will add train capacity and expand rail service between Los Angeles and the Southeast. It also announced plans to spend $3.20 billion on capital expenditures in fiscal 2007 to improve infrastructure in Wyoming's Powder River Basin (the largest coal-producing region in the U.S.) and double-track the Sunset Corridor between southern California and Texas. The company saw record financial performance in the second quarter of fiscal 2007, driven by strong revenue performance across four of its six segments and net income increases aided by margin expansion, higher other income and a lower effective tax rate. Because Union Pacific's business is cyclical in nature, it is quite sensitive to changes in economic conditions. Severe weather conditions, currency volatility and higher-than-expected fuel prices could have an adverse impact on its performance.