Impinj was briefly discussed on this board a while ago. Saul said he bought a starter position and then sold it quickly. Bert recently wrote a favorable review on SA:
Here’s the summary:
Impinj is that company that has been supposed to partner with Amazon as part of the Go initiative.
While a relationship with Amazon may or may not exist, the company reported a very strong Q4 which was noticeably above its forecast and consensus expectations.
Management is expecting more moderate growth this year in line with historical levels - although a 32% increase in end-points at current scale is no mean feat.
The company is modestly profitable, but expects to continue to reinvest upside to capture the opportunities in its space that it foresees.
PI continues to dominate its space and to develop more and more partnership products and its intellectual property portfolio.
I currently hold no position but I’ve not reinvested all my funds yet from the recent sale of SBNY and was considering a small position. Any thoughts on this company would be appreciated.
PI continues to dominate its space and to develop more and more partnership products and its intellectual property portfolio.
This is quite a small company and I wouldn’t say the dominate their space. Total they are less then 250 employees so likely do most sales through the channel so they will always be developing partnerships. RFID has always been one of those next big technologies but never really had the growth that they have been saying for the last 10 years. Not to say IP won’t be a good investment, but there really are not a dominate player in the field and other companies also try to leverage cloud based solutions in their RFID offerings.
JDC, I appreciate your reply, you are probably right about PI being a channel seller for the foreseeable future. That’ll cut into margins I imagine. But I think you’ve overlooked the importance of the RAIN standard.
I wrote the first barcode standard for the Boeing company in the '80s. At the time bar codes were pretty new because laser scanning technology was finally cheap enough and portable enough (hand-held) to be economically viable.
The problem was the primary use of barcodes at the time was UPC (Universal Product Code). UPC has the drawback of being able to only represent numeric data, no alpha characters, no punctuation. Virtually every Boeing designed part and tool was identified by alphameric characters including a hyphen. This is true for almost all engineering/manufacturing companies. Part numbers evolve from the WBS, and work breakdown structures are traditionally alphameric.
A small company named Intermec in Lynnwood WA (not far from Impinj), founded by a former Boeing engineer developed Code 39 a barcode standard that is able to represent alphameric characters and a limited number of special characters. Intermec placed the standard in the public domain, they designed and marketed scanners and specialized barcode printers. I worked with the engineers at Intermec while developing the Boeing internal standard. Code 39 became the standard barcode throughout the aerospace and automotive industry, probably others as well.
Impinj is not just a company that makes RFID tags. They specialize in RFID that complies to the RAIN standard. Like Intermec (at the time), they pretty much have a corner on this market, and the RAIN standard is becoming the standard of choice by a number of pretty important players who also happen to be Impinj partners. That makes them something different from a small fish in an ocean. They’re more like the only fish in a the pond right now. They have a large portfolio of IP that protects them pretty well, but of course, any company can build tags to the RAIN standard. But when it comes to size, cost and read range they are pretty far out ahead of the pack. “Pack” is generous, maybe the other dogs in the race is a better metaphor.
JDC, I appreciate your reply, you are probably right about PI being a channel seller for the foreseeable future. That’ll cut into margins I imagine. But I think you’ve overlooked the importance of the RAIN standard.
I wrote the first barcode standard for the Boeing company in the '80s. At the time bar codes were pretty new because laser scanning technology was finally cheap enough and portable enough (hand-held) to be economically viable.
The problem was the primary use of barcodes at the time was UPC (Universal Product Code). UPC has the drawback of being able to only represent numeric data, no alpha characters, no punctuation. Virtually every Boeing designed part and tool was identified by alphameric characters including a hyphen. This is true for almost all engineering/manufacturing companies. Part numbers evolve from the WBS, and work breakdown structures are traditionally alphameric.
A small company named Intermec
I am not too familiar at the moment on RAIN standard, I have been in the industry for 12 years so seen a lot of promise on the future but never close what the what everybody hoped. I know you are in China a lot, perhaps sometime we will catch up for a beer if we are there around the same time. I know many people in the former Intermec team that are now at Honeywell in Asia, so a chance we may have some common connection.
I remember working with somebody that back in the 80’s had the choice of a job at Microsoft but choose Intermec. What could have been…
I bought shares of Impinj several months ago, primarily because of Bert’s deep dive on it. But recently I began to wonder if it was going to turn out like the 3-D printing stocks that were heavily touted awhile back. I did not do well in those. Anyway, that, coupled with the fact that I just was getting a bad feeling about my investment in Impinj, caused me to sell my shares last week. Not sure how many of the people on this board believe in gut feelings, and I do know that emotions can ruin an investment portfolio, but my gut feelings have served me well over the years, and I think they are actually different than emotions.
Sorry I have nothing more technical to add. Good luck brittle rock. I’d be interested in hearing what you decide about this stock.
JDC,
Are you also in China? I’ll be here another 2 weeks or so. On our way to Sanya today (cloudy and raining, can’t plan the weather). Then back to Guilin for another week. Then back to the Pacific NW for most of the year.
Yeah, I too had a chance to work for Microsoft in the early 80s. But I just had a new baby and decided I prefered the security of a big aerospace company with benefits and a pension and … oh well.
Still on the fence with Impinj, which means I’ll probably not go for it or at most a very small investment just to keep it on my radar . . .
Speedy,
I just wrote to JDC that I’m still on the fence. Knowing the way I am, being on the fence for a while makes me uncomfortable and I usually end up taking a pass, so that’s the way I’ll probably go with Impinj. I live in the Seattle area which where Impinj is located. I might drop by their office when I return in a couple of weeks and try and get a feel for what’s going on . . .
I actually like the look of Impinj a lot and am considering a holding. I just wished I could understand why RFID didn’t take over the planet as we all thought it would. I also don’t understand enough about how QF codes etc replaced barcodes and whether there is any disruptive type threat to RFID with such a substitution and how it fits into a world of IoT and the whole Cellular vs Wifi debate.
Ant
No, I am staying in the UK at the moment but I normally am living in Singapore. Will probably be returning in a few months. But my wife is also China though lives in Germany. But she flies a lot to China so I go there quite a bit to meet her as well as for work.
Sanya is nice but probably very crowded. I was there 2 years ago in January and the beach was packed
Impinj is not just a company that makes RFID tags. They specialize in RFID that complies to the RAIN standard. Like Intermec (at the time), they pretty much have a corner on this market, and the RAIN standard is becoming the standard of choice by a number of pretty important players
I was trying to look more into the RAIN standard and what advantage it may give Impinj, there seems to be 130 companies that are members in the RAIN organization. I am sure some make RFID tech others maybe provide solutions around it. Not certain but I do see some other companies that are likely competitors also involved in RAIN
Maybe they will start growing on more value added solutions but they still seem like they are in a commodity business to me. After all, even their website is boasting about “Impinj sells 10 billionth chip”
Way, way off topic . . .
In Sanya now. Cloudy, but actually not bad, cool breeze and not too hot. Also, not too crowded in Dadonghai bay area, fairly new on the development map. Virtually all the western folks here are Russian, I think I’m the only American here, at least I’ve not overheard any other English speakers. A lot of signage in is Chinese, English and Russian. Can they all be part of the kleptocracy or the mob?
In Sanya now. Cloudy, but actually not bad, cool breeze and not too hot. Also, not too crowded in Dadonghai bay area, fairly new on the development map. Virtually all the western folks here are Russian, I think I’m the only American here, at least I’ve not overheard any other English speakers. A lot of signage in is Chinese, English and Russian. Can they all be part of the kleptocracy or the mob?
Seems like Sanya actively promotes to Russian tourist, especially Dadonghai. I don’t recall seeing many there but then it was a couple years ago and I was there for work. Only had 1 afternoon to explore and the rest of the time was spent working.