Procter & Gamble (NYSE:PG) shares this week crossed $90 for the first time since 2014 following reports that a new, well-funded investor has built up a huge stake in the consumer products giant.

Trian Fund Management, led by billionaire Nelson Peltz, recently added P&G to its targeted portfolio of just eight stocks, according to a 13-F report filed with the Securities and Exchange Commission on Feb. 14. The filing shows purchases of $540 million as of the end of last year, but that stake has since expanded past $3 billion to become Trian Fund's largest investment yet, equivalent to nearly 2% of Procter & Gamble's business.

A woman shopping for cleaning supplies.

Image source: Getty Images.

Meet your new owner

Peltz is an activist investor who routinely pushes the companies he owns to make dramatic changes to their business. Back in 2013, for example, after acquiring over $1 billion of PepsiCo (NASDAQ:PEP), the fund called the earnings situation at the time "unsustainable" while agitating for either a merger with another of its holdings, Mondelez, or splitting Pepsi's global snacks and beverage portfolios into separate public companies.

Trian didn't convince management to make either bold move, but the fund believes it pressured executives to make other important changes such as increasing advertising investments and cutting costs. Peltz and his team exited their Pepsi position last year with solid, market-beating gains while claiming that their efforts resulted in a "substantially higher [earnings] multiple" for the stock.

The difference this time

P&G is in a stronger position than Pepsi was back in 2013. Sure, it has lost market share in each of the last two fiscal years while dramatically underperforming its profit growth targets. But growth trends are now moving in the right direction. P&G boosted its organic sales gain forecast last quarter and seems on track to outgrow rival Kimberly-Clark (NYSE:KMB) for the first time in years. The company also expects to hit its target of mid-single-digit earnings gains in fiscal 2017.

A jug of Tide liquid detergent stands next to a container of Tide Pods.

Image source: P&G.

It's also hard to argue that P&G executives haven't been bold enough. They recently concluded a brand-shedding process that they described as the biggest transformation in the company's history. A portfolio of 165 franchises sprawling dozens of categories is now focused on just 66 brands across 10 key consumer divisions. Low growth and low profit brands are out, and what's left are market-leading franchises like Pampers, Gillette, and Tide.

P&G has also been about as aggressive in cutting costs as a shareholder could hope for. Over $7 billion has been sliced out of the business over the last five years and management is targeting a further $10 of savings over the next five years. The combination of cost cuts and brand divestments has funded a capital return program that, at $22 billion this year alone, even a billionaire would have to call generous.

Finally, Trian doesn't have much room to push for greater advertising investments given that P&G is already the world's biggest advertiser and is currently ramping up spending in that arena. Executives are finding encouraging success in initiatives like a sampling program that's aimed at creating loyal customers through trial products.

Will P&G and Trian get along?

It's not clear right now whether Peltz will try to convince P&G's management to take a sharply different strategic track or if CEO David Taylor and his team will be open to the suggestions. The consumer titan's only comment so far is that executives "welcome investment in our company."

The stock has badly trailed the market over the last five years, which could add pressure on management to listen to any ideas that Trian pitches. Yet P&G's bold moves over the last few years appear to be working, and the stock is valued at a solid earnings premium over both Kimberly-Clark and Unilever. That doesn't leave a lot of room for the type of multiple expansion that the Trian fund is likely after.