NEW YORK ( TheStreet) -- Solar stocks may be slouching towards the mistletoe given the recent share price declines across the sector, but ReneSola ( SOL - Get Report) received a stock-price stuffer on Thursday morning when Goldman Sachs initiated coverage of the Chinese solar wafer maker at a buy and with an $11 price target.

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ReneSola shares were up 7% to the $9 mark on Thursday morning and hit their average daily trading volume within the morning session.

Over the past three months, ReneSola shares slipped by 18% as part of the general solar sector slump. Shares fell as low as the $8 just last week.

Even with the outlook in solar still uncertain headed into 2011, and no one able to answer the $64,000 question about supply versus demand, there has been some limited bottom-fishing going on within solar stocks, especially with the multiples at which Chinese solar stocks have been trading.

Goldman more or less concedes the current investor reluctance to play solar stocks, saying that there should be a "rebound in the stock when investors' risk tolerance for the solar sector increases."

A cheap multiple was cited by Goldman in its Renesola buy call. "We think it is attractively valued at 3.9X 2011E P/E."

ReneSola shares are up 90% year-to-date, and Goldman says its share price strength in 2010 was mainly due to its significant gross margin expansion.

The 90% run-up in shares hasn't stopped other Street firms from making a bullish wager on ReneSola. Macquarie Securities initiated coverage of ReneSola at a buy after the big run-up in shares, saying the 90% rally year-to-date was just the beginning for ReneSola.

ReneSola faces increased competition in 2011 from Chinese solar giant GCL Poly, which plans to bring on low-cost wafers to the market, as well as competition from LDK Solar ( LDK). "We expect GCL-Poly to expand aggressively with ultra low cost based wafer capacity in 2011, backed up by 100% internal silicon production, which could eventually push down wafer ASPs sooner than expected," Goldman analysts wrote.

Goldman thinks gross margins will dip slightly in 2011 and 2012 from current levels, but still it doesn't warrant the recent dip of more than 40% from ReneSola's high share price, and there is 31% potential upside in shares of the Chinese wafer maker.

Goldman analysts also believe that ReneSola has defensively positioned itself for any weakness in wafer pricing by its move into the OEM module business. ReneSola has guided for 400 megawatts of module OEM shipments in 2011, and the move is compared by Goldman to Chinese solar cell maker JA Solar's ( JASO) move into module sales as a way to create a captive sales channel for its middle-of-the-supply-chain solar product.

Cheap multiples and increasing vertical integration are not new ideas as far as reasons to play Chinese solar stocks, though a focus on input players like the wafer makers has been a popular strategy ahead of an uncertain 2011.

Also not new in solar is insider selling being done by executives of First Solar ( FSLR - Get Report). First Solar president Bruce Sohn sold First Solar shares for the second time in as many weeks, unloading another 5,000 shares of the U.S. solar bellwether's stock for a profit of $532,000 on Dec. 21. Last week, the First Solar president sold $700,000 worth of First Solar shares.

First Solar insider selling activity is watched closely for any sign from First Solar executives that a share price ceiling is being called. Even more so, the First Solar stock selling conducted by the Walton family, of Wal-Mart fame, is monitored closely, as the Waltons have a history of well-timed First Solar sales.

Sohn's selling, on the other hand, has occurred throughout the past two months, and at several share price points within the recent First Solar trading pattern. In November, Sohn unloaded 13,000 shares of First Solar, at as low as a share price of $127 and at as high of a share price as $140.

Last week's sale by Sohn was the most notable of his transactions, because it occurred again at the $140 level, and First Solar shares have slipped since. Sohn sold right before First Solar held its annual investor outlook day, after which shares would slide all the way to the $132 mark. The $132 mark is where Sohn again sold First Solar shares this week.

Selling First Solar at the $140 mark is a notable occurrence, because the $140 level has long served as a barometer for where the Walton family thinks it's a good point to take profits off the table.

First Solar shares were unchanged on Thursday.

-- Written by Eric Rosenbaum from New York.

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