Mario Gabelli said his fund company bought Mattel, calling it a "work in progress."
Shares of the toy company shot up 6.6 percent on Thursday amid his comments.
Mattel, the maker of Barbie, Fisher Price and other toys, said last month that global sales fell 13 percent in the third quarter, largely because of the bankruptcy of retailer Toys R Us.
Gabelli told CNBC's 'Halftime Report" panel that he liked Hasbro as well, but doesn't own any. He said he liked Mattel because of the price. The stock has fallen 48 percent this year.
He is also buying small company stocks in entertainment and gaming, naming Golden Entertainment, Eldorado Resorts and RLJ Entertainment. "There are so many interesting companies out there where you could double or triple your money," he said.
Gabelli has said he likes shares of companies that control media content, whether that be movies, television or music. Gabelli funds own shares of AT&T, Time Warner, Walt Disney Co., and 21st Century Fox, among other companies.
CNBC reported earlier this week that Disney had approached 21 Century Fox about a potential deal to buy its movie and television production assets.
AT&T struck a deal to buy Time Warner last year but finalizing the transaction has stalled as the Justice Department continues to review it for anti-trust. On Wednesday, word came that the government might seek a sale of Time Warner's Turner Broadcasting, a unit that includes CNN, or its DirectTV business to get approval for the merger.