$Petroleo Brasileiro SA(PBR.US) revenue dropped by 7%, and its five-year investment plan was also cut by 20%. What's puzzling is that net profit instead surged by 62%, with over 160 billion USD pocketed. Is this the peak of a cyclical stock? This is about achieving higher profits with less money. How many oil and gas companies can deliver such a report card?

You worry it's still that old state-owned enterprise that only knows how to sell oil to China. Well, its fourth-quarter exports directly hit 1.2 million barrels per day, exploding by 79% year-on-year. India went from 0% to 12%, while South Korea, Thailand, and Singapore are all new tables. It's not even afraid of its share in Europe and the US being diluted—the more dispersed the customers, the stronger the bargaining power. Try asking its peers to replicate that.

The most outrageous part is the valuation. A P/E ratio just over six, a dividend yield of nearly 7%, pre-salt assets with the world's lowest extraction costs, and it's holding onto production-sharing contracts like Sepia and Atapu that start spewing cash once oil prices exceed $40. BlackRock and UBS all have buy ratings, and Citigroup just raised its target price. This is a giant with annual profits nearing $20 billion, never stingy with dividends, and just acquired BP's solar business to dip its toes into energy transition. Yet the market insists on selling it at a discount as if it were an ordinary oil peddler—are you going to pick up this bargain? Others are already lining up to do so.