Sell Impinj (NSDQ: PI)

Impinj has been a terrific stock. It is up 62% since my December recommendation despite little upward movement in earnings estimates.

The move is due to speculation that the company’s tagging RFID technology will be used by Amazon in its checkout-less grocery store concept. Amazon’s purchase of Whole Foods fueled that speculation.

Neither company has commented on whether Amazon will use Impinj’s technology, so I’ve been wrestling with how to handle the stock. There are surfeit data supporting the bull and the bear case on Impinj but the stock now has a P/E of 100 times 2018’s estimate of $.54.

The stock will move higher if it is confirmed that Amazon is using its product. Both Amazon and Impinj are participating in a RFID industry conference on July 20. It is possible an announcement is made at this event but investors should be aware that Amazon is notoriously closed-mouthed when it comes to discussing particulars about its business model.

I fear the stock will gap way down if an announcement is not made at that event and would rather book this impressive gain. Morgan Stanley, the lead underwriter for Impinj, echoed this sentiment yesterday telling investors they would “have better chances to buy the stock down the road”.