Red Flag Alert – An Overlooked Risk at DexCom. Also, Updates on Past Red Flag Alerts.

Just because something isn't listed in the 'risk factors' section of a company's regulatory filings doesn't mean it's not a possible 'risk'...

Take DexCom (DXCM), for example. It's a wildly successful manufacturer of continuous glucose monitors ("CGMs"), which just happens to be headquartered not far from me here in San Diego.

Because of the stock's remarkable rise, DexCom has steamrolled its share of skeptics and short sellers over the years, who felt the company was overstating the potential size of its end market... and understating the potential impact from competition.

As it turns out, even with competition – mostly from Abbott Laboratories (ABT) – it has done exceedingly well.

The reason is obvious: With a CGM, you don't have to stick yourself in the finger several times a day to test your blood sugar. You wear it for a week or two – just set it and forget it.

The bullish angle now is that “you ain’t seen nothing, yet”, especially with this year's start of coverage of CGMs by Medicar…