Billionaire Mason Hawkins’ 10 Small-Cap Stocks with Huge Upside Potential

2. Mattel, Inc. (NASDAQ:MAT)

Market Capitalization: $5.06 billion

Number of Hedge Fund Holders: 30

Southeastern Asset Management Stake: $135,321,460

Analyst Upside Potential: 53.06%

Mattel, Inc. (NASDAQ:MAT) is an international toy and family entertainment company. It operates through two main segments including the North American segment which covers the United States and Canada, and the International segment which covers global markets. The company has a range of popular toy brands including Barbie, Hot Wheels, UNO, and more.

On April 14, the company announced renewing its global partnership with WWE, which is an international wrestling entertainment brand. The renewal means that Mattel, Inc. (NASDAQ:MAT) can continue to design, manufacture, and sell WWE-themed toys and action figures. In addition, the company posted growth during the fiscal fourth quarter of 2024. Its net sales grew 2% year-over-year to reach $1.64 billion, with margins at 50.7%, reflecting a 190 basis points increase.

Ariel Appreciation Fund mentioned Mattel, Inc. (NASDAQ:MAT) in its Q1 2025 investor letter, stating that the company remains undervalued considering the expected buyback activity. Here’s what the fund said about the company.

“Several stocks in the portfolio delivered solid returns in the quarter. Toy manufacturer Mattel, Inc. (NASDAQ:MAT) advanced over the quarter, following strong earnings results highlighted by solid sales growth, margin expansion and robust free cash flow generation. Management also provided full year 2025 1The “Magnificent Seven” are the largest stocks in the S&P 500 Index driving market performance: Apple Inc. (AAPL), Amazon.com, Inc. (AMZN), Alphabet Inc. (GOOGL), Meta Platforms Inc. (META), Microsoft Corp. (MSFT), NVIDIA Corp. (NVDA) and Tesla, Inc. (TSLA). guidance ahead of Wall Street expectations. With buyback activity expected to accelerate and the company poised to grow market share in 2025, we believe shares remain undervalued at current levels. Attractive opportunities to exploit its intellectual property through future film and TV projects only heighten our conviction.”