What's going on?

Peugeot, the French carmaker, reported its first full year profit in 5 years � and its stock jumped 6% before finishing up 1.5% for the day (on a day when most other European stocks sold off sharply).

What does this mean?

Peugeot has pursued a different strategy than its bigger rivals (like Volkswagen and Ford). It�s focused on making more profit for each vehicle it sells rather than on simply selling more vehicles. In other words, it has prioritized its �profit margin� over its �volume.� Peugeot�s profit margin improved over the course of 2015 and the level achieved pleasantly surprised investors.

Why should I care?

For the stock: Peugeot�s turnaround has been impressive. Two years ago, the company almost collapsed. The French government bought a stake in it as part of an effort to stabilize it. Since then, a new CEO has turned Peugeot around and made it profitable. It has been helped by a recovery in the European car market, where Peugeot is the second largest player (as the broader economy recovered, more people have bought cars). But it�s also just executed exceptionally well on its cost cutting plan.

The bigger picture: Peugeot is going to make cars in Iran. Part of its future growth strategy involves expanding sales outside of Europe. With that in mind, it recently signed an agreement to partner with an Iranian company to make and sell cars in Iran. This is a prime example of how the nuclear deal with Iran has led to investment opportunities for foreign, especially European, companies.