Drill, Dig, and Deposit: Inside David Burrows’ 3-Stock Power Play
How ARC Resources, Agnico Eagle, and Banco Santander are powering portfolios in a liquidity-driven bull market.
The markets are shifting. After a year of volatility, corrections, and unexpected macro shocks, investors are again hunting for clarity—and conviction. David Burrows, Chairman and Chief Investment Officer of Barometer Capital Management, has both. With an eye on North American large caps and ETFs, Burrows is leaning into structural strength, free cash flow, and pricing power. His June 11 picks—ARC Resources, Agnico Eagle, and Banco Santander—each tell a story of resilience and growth in a world recalibrating after the Trump tariff shock and global monetary easing.
Burrows’ overall market outlook is bullish, and his rationale is as methodical as it is pragmatic. Liquidity remains the ultimate driver of equity prices. With financial conditions easing and populist fiscal policies in full swing across much of the developed world, the macro setup continues to favour pro-cyclical assets. We’re seeing consistent outperformance in equities and commodities compared to bonds and traditional bond proxies—a clear signal that flows are rotating toward expansion. This is not just about momentum. It’s about leadership. And the sectors currently leading the charge—financials, industrials, defense, materials, and parts of the energy space—are being powered by real earnings, strong balance sheets, and institutional flows.
ARC Resources: Riding the Gas Wave and LNG Tailwind
ARC Resources, Burrows’ first pick, exemplifies that pro-cyclical leadership in action. As one of Canada’s most efficient and sizable natural gas producers, ARC is well-positioned to benefit from a convergence of tailwinds: the rise of LNG, the power demands of AI-driven data centers, and growing global appetite for cleaner energy alternatives. ARC’s core strength lies in its dominant position in the Montney formation, which is arguably one of the most cost-efficient gas plays in North America. This gives ARC not just a scale advantage, but a resilience edge when volatility hits.
The company’s cash flow profile is robust—so much so that a significant portion of its free cash flow is returned to shareholders through dividends and buybacks. That’s not theoretical generosity—it’s operational reality. A three-year dividend CAGR of over 35 per cent speaks volumes about its commitment to investors.
What really moves ARC into “getting better” territory is its exposure to LNG exports. The upcoming commissioning of LNG Canada in late 2025 is a game-changer. It means ARC’s gas can fetch international prices, not just North American spot prices, boosting its margins. Add to that its contracts with U.S.-based Cheniere Energy and you’re looking at a company that is structurally upgrading its pricing deck.
Attachie Phase I is already online and ramping, while Attachie Phase II, scheduled from 2026 through 2028, promises an additional 40,000 boe/d of production. This kind of phased growth, rooted in operational execution, is exactly the formula Burrows likes.
Of course, risks remain. A broad sell-off in commodities, weaker-than-expected demand, or an oversupply shock could damage sentiment and earnings. If the anticipated data-center-driven power demand doesn’t materialize, valuations could compress. But for now, the trajectory remains solid.
Agnico Eagle: Gold Strength in Safe Jurisdictions
Next on the list is Agnico Eagle—a company built for turbulent times. This is not a speculative gold junior. This is a 3.5 million ounce per year powerhouse with 90 per cent of its production coming from politically safe and geologically blessed jurisdictions: Canada and Australia. Agnico is low-cost, highly liquid, and has a pipeline filled with brownfield development projects, which drastically reduce risk.
Agnico’s capital structure is also a strong point. The company ended its last quarter with $922 million in cash and $2 billion in undrawn credit. This kind of flexibility allows the company to maintain its $0.40 per share dividend over the next year, while also buying back shares and reducing debt—specifically $540 million worth over the next 12 months. Capital allocation here isn’t just conservative. It’s strategic.
Burrows sees further upside thanks to its active exploration and project development. Whether it’s East Gouldie, the underground extension at Detour Lake, or Patch 7 at Hope Bay, the pipeline is not just full—it’s producing results. The 2025 acquisition of O3 Mining added another 1.3 million ounces of reserves to the portfolio, a move that solidifies Agnico’s global standing. M&A here isn’t reckless—it’s synergistic.
That said, as with all miners, risks include commodity price weakness, operational disruptions, or exploration projects that underdeliver. But in a world where gold is increasingly seen as a hedge against both inflation and geopolitical instability, Agnico looks more like a cornerstone than a concern.
Banco Santander: Undervalued Global Exposure with a Digital Edge
Banco Santander rounds out Burrows’ top picks—and it’s a savvy contrarian bet. While most North American investors are obsessed with big U.S. banks, Santander quietly stands as Europe’s largest bank by market cap, with $124 billion in assets and a footprint that spans Latin America, the U.S., and key European markets. This is a truly global institution with return on tangible equity between 13 and 15 per cent—metrics that rival or even beat some U.S. giants.
Where Santander really shines is in capital returns. The bank currently yields just over 3 per cent, with a dividend CAGR of 28 per cent over the last three years. And it isn’t just dividends—it’s buybacks, too. That return-focused culture is a key part of why Burrows sees the stock as undervalued. At just 9x earnings, compared to JPMorgan at 15x or RBC at 14x, the upside from a potential re-rating is real and significant.
What’s more, Santander is transforming. They’re not clinging to legacy banking models. Instead, the bank has doubled down on profitable geographies while pulling back from lower-return regions. Their digital banking capabilities are among the best in Europe, providing a platform for scalable, low-cost growth. While regulatory risks and European political dynamics are always on the radar, the valuation here more than compensates for those concerns.
Final Thoughts: Free Cash Flow, Global Breadth, and Structural Strength
Burrows’ picks don’t chase trends—they capitalize on inflections. ARC Resources stands at the crossroads of North American energy production and global LNG demand. Agnico Eagle is a low-risk gold powerhouse focused on long-term cash flow and brownfield growth. Banco Santander offers global exposure at a discount, with a digital edge and a disciplined capital return strategy.
Each name shares a common DNA: strong free cash flow, self-financing operations, and a strategy that works in a post-tariff, liquidity-rich, geopolitically complex world. These aren’t speculative trades. They’re structural investments—and Burrows believes they’re just getting started.