STOCK PICKS: Top 5 Large-Caps Aug. 13

Looking ahead to full year 2008, the company reiterated that it expects to achieve the upper end of its previously announced EPS guidance of $3.40 to $3.60 a share on a comparable basis. Bear in mind, however, that CSX's business is cyclical in nature. While the company has done well so far at avoiding problems caused by changing economic conditions, it could still be sensitive to such changes in the future.

Union Pacific (UNP Quote) provides rail transportation through its principal operating company, Union Pacific Railroad Company, which runs the largest railroad in North America.

Union Pacific has been rated a buy since February 2005 due to its record of earnings per share growth, improvements in revenue and net income, consistent cash flow from operations, and solid stock price performance. During the second quarter of fiscal 2008, the company's earnings grew 19.1% year-over-year, boosted by higher shipments of coal, grain and fertilizer. Earnings were partially offset by rising fuel costs and the recent flooding in the Midwest. Additionally, net operating cash flow increased 32.93% when compared to the second quarter last year.

While the recent Midwest flooding caused a decrease in earnings for the second quarter, management was pleased with the resiliency that Union Pacific's network exhibited after the crisis, with a quick restoration of service allowing the company to finish the quarter strongly. The company anticipates challenges from high fuel prices and a soft economy going forward, but expects that it will be able to take advantage of the opportunities presented by a diverse business mix. However, any failure to counter these issues could affect the company's future prospects.