NEW YORK (TheStreet) -- Transportation stocks have rolled over the industrials over the past year, with the Dow Jones Transportation Average returning 25% compared with the DJIA's 12% gain. And some fund managers say that planes, trains and shippers will once again lead the way in 2011.

"We are focusing on the transports because of the high barriers of entry, sizable dividend yields and, in the case of the railroads, the increasing costs of fuel, which is putting the trucking business at a disadvantage when it comes to competing for low-cost shipping options in North America," says Dan Neiman, manager at the

Neiman Large Cap Value Fund

(NEIMX) - Get Report



searched for 2011's titanic transport stocks with Neiman and Eric Marshall, director of research for the

Hodges Small Cap Fund

(HDPSX) - Get Report


Kirby Corp.

(KEX) - Get Report

Houston-based Kirby operates inland tank barges and towing vessels transporting petrochemicals, black-oil products, refined petroleum products and agricultural chemicals throughout the United States' inland waterway system. Kirby also owns and operates four ocean-going barge and tug units transporting dry-bulk commodities. As the largest inland barge operator in North America, Kirby controls roughly a third of the market with most competitors consisting of much smaller, local companies.

Back on dry land, Kirby also has a railroad element through its diesel engine services segment. The company provides after-market service for medium-speed and high-speed diesel train engines. Kirby's stock performance has certainly has been stronger than a locomotive, up 30% over the past year, and Hodges' Marshall expects more gains in 2011.

"Kirby has the critical mass in a capital-intensive business, which gives them competitive advantages in dealing with large customers in industries such as petrochemicals. Although they are limited to waterways, barges are like the railroads in that they have a real advantage to see utilization leverage in an improving economy due to the fact that they offer the lowest-cost form of transportation," says Marshall.

Norfolk Southern

(NSC) - Get Report

Norfolk Southern operates about 21,000 route miles in 22 states, serving every major container port in the eastern United States. The company, which is a major transporter of coal, has seen its shares rise 23% over the past 12 months as the demand for the commodity has surged.

Fund manager Neiman, who also likes fellow rail stocks

Union Pacific

(UNP) - Get Report


Canadian National Railway

(CNI) - Get Report

, sees earnings at Norfolk Southern continuing to rise based on an increased demand for coal and other commodities.

"We see Norfolk Southern undervalued even as it hits a 52-week high due to a rise in its estimated five-year growth rate from a previous five-year rate of 5% to 15% for the next five years. If new technology does what's promised in improving capacity and reliability while increasing speed and saving fuel, NSC should continue to outperform," says Neiman.

AMR Corp.


One of the nation's largest carriers, American Airlines serves 250 cities in 40 countries with, on average, more than 3,400 daily flights. The combined network fleet numbers more than 900 aircraft. And while American has been battling third-party ticket sellers over distribution costs and methods, the company recently reached a deal with


to use its direct-connect technology to access fares.

American has certainly soared over its competitors over the past six months, with the stock up 25%. Over the same period,


(DAL) - Get Report


United Continental

(UAL) - Get Report

have risen 6% and 3.5%, respectively. And while many analysts warn the stock's price may be getting into Icarus-like altitudes, Marshall says it can still fly higher.

"The industry has been through a long, painful period of consolidation and rationalization of capacity. As a result, pricing power for airlines could recover quickly even as the economy recovers at a much slower pace, which should be good for margins. AMR is not the best of breed among the airlines, but we believe it's the one with the most upside based on valuation and the amount of leverage in its business model," says Marshall.

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