A couple more days like this, and I might be an owner of Genesee & Wyoming (NYSE:GWR) again. While there are some reasons to be a little concerned about this short-line railroad, I don't think any of them are especially new.

Revenue for the first quarter rose more than 34%, and almost 12% on a same-rail basis, since pricing across the railroad industry remains favorable. That's fortunate, because volume growth is rather weak. Carloads were up less than 4% on an organic basis this quarter, and even my favorite Class 1 railroad whipping boy, Union Pacific (NYSE:UNP), managed better than that.

It's worth mentioning, though, that Genesee & Wyoming doesn't necessarily have quite as many options for boosting carload growth as larger operators. As I understand Genesee's network, its rails often serve a single supplier or customer, reducing its opportunity to balance out weakness in one area with strength in another. Lingering problems in Mexico from hurricane damage are further restraining operations.

That said, the company seems to still be doing quite well from an operational perspective. Operating income was up nearly 55%, and the operating ratio improved by two and a half points to 80.5. Subtracting Mexico from both periods makes the comparison even better (78.8 vs. 82). It's also worth noting that the quarter contained some non-operating expenses tied to the pending sale of Australian operations, wash-outs in Australia, and stock option expense.

Listening to management on the call, it seems likely that more deals are on the way -- it says it sees several good prospects, and the balance sheet should be liquid enough to allow further deals without adding too much risk to the story.

These shares still don't look especially cheap. Then again, they didn't a year ago, and the stock has doubled since then anyway. Still, if the rail boom hasn't enticed me to chase Burlington Northern (NYSE:BNI) or CSX (NYSE:CSX), let alone Canadian National (NYSE:CNI), I won't chase Genesee either. At the right price, it's a great stock. But when I have to choose between valuation models that have worked for me for years and a single stock or industry, I'll stick to the model and grudgingly look for better values elsewhere.

For more Foolish thoughts on the railroads:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).