Comverge shares rise after analyst starts at 'Buy'

Shares rose 70 cents, or 11.6 percent, to $6.72.

In a note to investors, Jefferies & Co. analyst Paul Clegg assigned a price target of $10 to the company, implying he expects shares to gain 66 percent over Monday's close of $6.02.

Comverge, which makes equipment for improving electric capacity, is trading below its fair value, Clegg said. In addition, investor expectations are so low that even modest good news--such as new contract wins or an earnings beat--could send the stock higher.

He added the stock is positioned to grow rapidly from adoption of its demand-response solutions, which helps utilities eliminate the disconnect between the cost of generating power and the price paid by consumers.

"We believe the company could instill greater confidence through continued strong expense controls, redeploying now idle (megawatts) into ancillary programs and winning incremental customers and metering contracts," Clegg wrote.

Shares of Comverge are down 79 percent for the year and have traded between $4.92 and $38.77 in the last 52 weeks.