Nestle SA  (NSRGY) - Get Report could be the next European firm in the cross-hairs of a U.S. activist investor after Dan Loeb's Third Point hedge fund pressed the world's biggest food company over the weekend to shed assets and increase share buybacks.

Third Point said Sunday it had built a 1% stake in Nestle, which would put the group among the ten largest shareholders of the Vevy, Switzerland-based group and wants management to pursue a series of options it argues would unlock shareholder value, including the sale of its 23% stake in luxury goods maker L'Oreal SA  (LRLCY) . The fund said it was being advised by Jan Bennink, the former CEO of Roya Numico. 

"Despite having arguably the best positioned portfolio in the consumer packaged goods industry, Nestle shares have significantly underperformed most of their U.S. and European consumer staples," Third Point said in a letter to investors. "It is rare to find a business of Nestle's quality with so many avenues for improvement."

Third Point said it hoped to have "productive" conversations with Nestle management, but described the company's culture as "staid" and noted a "tendency towards incrementalism that has typified the company's prior leadership and resulted in its long-term underperformance."

Nestle should set a margin target of between 18% and 20% by 2020, Third Point argued, and increased its leverage in order to facilitate sharebuybacks.

Nestle shares closed at Sfr82.10 each in Zurich Friday after falling around 0.18% on the session, trimming the year-to-date gain to around 12.4%, outpacing the 9% advance for the Stoxx Europe 600 Food & Beverage sub index. However, Nestle's gains fall far short of the 30.2% year-to-date increase for rival Unilever Plc (UL) - Get Report .

Earlier this month, Nestle said it will explore strategic options for its U.S. confectionery business, it said Thursday after markets closed in Switzerland. The unit could be worth as much as $3 billion, according to some analysts, with Jefferies putting the price tag between $1.5 billion and $2 billion.

Nestle's US confectionery business had sales of around Sfr900 million ($923 million) in 2016. It primarily includes chocolate brands such as Butterfinger, BabyRuth, 100Grand as well as local sugar brands such as SweeTarts, LaffyTaffy, and Nerds.

The review is expected to be completed by the of the year and does not include Nestle's Toll House baking products, "a strategic growth brand which the company will continue to develop in the U.S. market," Nestle said.