David Burrows, Chairman & CEO, Barometer Capital Management
Focus: North American large caps
Top Picks: GE Vernova, Canadian Pacific Kansas City, cash
MARKET OUTLOOK:
Barometer currently is sitting on an elevated 20 plus per cent cash weight across portfolios. While earnings revisions and purchasing managers index (PMI) data have been robust, it is currently impossible to forecast the degree of foreword looking impact the disruption of trade through the Strait of Hormuz may have on the data. Inflation remains the biggest risk to investors.
Recent deterioration in equity market breadth suggests markets are repricing risk. Given that private clients expect us to not only try to generate returns but more importantly expect us to manage risk, we get more cautious when the calculus changes. We are active in building our “farm team” but holding off on adding new positions.
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TOP PICKS:
GE Vernova (GEV NYSE)
GE Vernova perfectly embodies our “good getting better” philosophy, currently undergoing a significant structural transformation. We aren’t just looking at a power company; we are looking at a revaluation candidate fueled by insatiable, AI-driven demand for grid infrastructure.
From a top-down perspective, the Industrials and Energy sectors are showing some of the strongest technical breadth we’ve seen since 2022. With over 70 per cent of the sector trading above its 200-day moving average, we have a clear “green light” to add exposure in this sector. GE Vernova is a clear leader here, trading well above its US$665 200-day line, confirming a robust primary uptrend.
Earnings Power: GEV is delivering explosive growth. . 2025 EPS surged over 200 per cent year-over-year, and management just raised 2026 revenue guidance to the $44 to $45 billion range.
Structural Change: The catalyst is the shift from a legacy utility supplier to a critical AI infrastructure play. The company is now selling “slot reservations”—customers are paying upfront just to secure production capacity through 2030.
Multiple Rerating: As the high-margin Electrification segment (transformers and switchgear) grows at over 20 per cent and loss-making wind contracts roll off, we expect a significant multiple revision higher.
We are buyers of strength but remain disciplined. For an intermediate-term position, we would implement a trailing stop loss just below the 50-day moving average, to limit downside risks.
Canadian Pacific Kansas City (CP TSX)
Canadian Pacific Kansas City (CPKC) represents a unique revaluation opportunity that aligns with our strategy of identifying “good getting better” through significant structural catalysts.
Current oil supply disruptions have sent diesel prices higher, creating a massive competitive advantage for rail. Since rail is roughly four times more fuel-efficient than trucking, CPKC is seeing a surge in “truck-to-rail” conversions. Shippers are aggressively seeking to mitigate their carbon footprint and fuel surcharges, and CPKC’s network is the primary beneficiary.
The merger with Kansas City Southern has created the first and only single-line rail network connecting Canada, the U.S., and Mexico. This isn’t just a logistical win; it’s a structural moat.
By eliminating interchanges at the border, CPKC reduces transit times by up to 48 hours, making it the “expressway” for North American trade.
The East-West lines provide unrivaled access to Atlantic and Pacific ports, while the North-South spine captures the “near-shoring” trend as manufacturing shifts from Asia to Mexico.
From a breadth perspective, the Rails are a leading sub-sector within Industrials. CP is showing strong leadership, recently crossing back above its $104.76 200-day moving average, which we view as a significant “green light” for new additions.
Growth: Management is guiding for low double-digit EPS growth in 2026, supported by record grain harvests and synergy realizations.
Risk Management: While we are bullish, we remain tactical. We recommend an intermediate-term stop loss at the 200 day MA, protecting against any unexpected contraction in North American trade volumes.
Cash
The Power of Optionality in a Contracting Market - At Barometer, we view cash not as a lack of ideas, but as a strategic asset. Our models currently indicate a clear “Red light” as global equity market breadth undergoes a notable deterioration. While headline indices like the S&P 500 have remained relatively flat in March 2026, the underlying participation has thinned significantly.
The data is compelling: the percentage of S&P 500 stocks trading above their 50-day moving average has fallen from over 60 per cent in February to just 33 per cent as of mid-March. This weakness suggests that the market’s heavy lifting is being done by a shrinking group of leaders, while the broader universe—the “average stock”—is starting to roll over. Globally, the Morgan Stanley Capital International All Country World Index (MSCI ACWI) breadth has also slipped, with only 68 per cent of global indices remaining above their 200-day moving averages, down from over 80 per cent just weeks ago.
Following our strict risk management protocol, we do not fight a contracting tape.
Stop Loss Discipline: As individual stocks hit our predetermined stops , we exit. We do not “hope” for a bounce; we move proceeds to the sidelines.
Building the “Farm Team”: This accumulated cash—currently at a just over 20 per cent—provides the optionality we need. It allows us to patiently monitor our “farm team” of companies that are showing relative strength despite the macro headwinds.
By letting cash build now, we ensure that when the “green light” eventually returns and breadth begins to expand again, we have the immediate liquidity to deploy into the next generation of “good getting better” leadership.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| GEV NYSE | Y | Y | Y |
| CP TSX | Y | Y | Y |
| CASH | Y | Y | Y |
PAST PICKS: APRIL 17, 2025
Wheaton Precious Metals (WPM TSX)
Then: $116.36
Now: $180.76
Return: 55%
Total Return: 56%
Expand Energy (EXE NASD)
Then: US$106.47
Now: US$104.77
Return: -1%
Total Return: 1%
Cash
Then: $50.07
Now: $50.02
Return: -1%
Total Return: 2%
Total Return Average: 20%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| WPM TSX | Y | Y | Y |
| EXE NASD | N | N | N |
| CASH | Y | Y | Y |
