Unfortunately for its shareholders, the Collins Foods Ltd (ASX: CKF) share price has fallen sharply this morning after the KFC operator's shares emerged from their trading halt.
At the time of writing Collins Foods' share price has fallen 9% to $5.33.
Its shares went into a trading halt yesterday after the company announced its plan to acquire 16 KFC restaurants located in the Netherlands from subsidiaries of Yum! Brands for a cash consideration of €62.3 million.
To fund the acquisition the company successfully undertook a fully underwritten $54.5 million placement at $5.25 per share and extended its existing lending facilities.
As the placement of 10.4 million shares came at a significant discount to its last close price, I can't say I'm surprised to see its share price tumble today.
But should you buy the dip?
I think today's dip is a great opportunity for investors to pick up shares at a reasonable price.
After today's decline its shares are changing hands at just 14x trailing earnings, a significant discount to rival Domino's Pizza Enterprises Ltd. (ASX: DMP).
Furthermore, I think this is especially good value considering its long-term growth potential from its international operations. As well as this expansion into the Netherlands, the company made a move into the German market last year as well.
Both markets have room for considerable growth, which could result in a sizeable boost to its top line over the next decade.
Because of this I would class Collins Food as a buy today.
