Homer Simpson may have coined the term "crisitunity," but savvy investors have long known that crisis brings unusual opportunities. Predating Homer by more than a century, the axiom to buy "when there's blood in the streets" came from Baron de Rothschild's reported financial advice during the Paris Commune of 1871, when the city's streets literally ran bloody.

In the wake of the nuclear plant damage in Japan, we've seen stock markets veer crazily, as investors give in to waves of fear. Members of my Motley Fool Hidden Gems service have posed a natural question to me: "Where should we invest now?"

Panic and potential
Maybe we should back up a step. Before getting to where we should invest now, it's probably good to revisit whether or not we should at all. Is buying during panics really a recipe for investment success?

In my experience, the answer is, "Yes!" Especially if you choose your targets well. During last summer's BP oil spill, Gulf-based energy stocks sold off massively, as investors sold first and asked questions later – or not at all. No wonder: Reporters and pundits felt comfortable making blithe comments about companies involved being bankrupt within months, if not weeks.

I know it was difficult to buy in that climate of fear -- because I did it myself, sweaty palms, pounding pulse and all. But I was so convinced of the potential in the panic that I wanted to make sure as many Fools could profit as possible. That's why I had my team at Motley Fool Hidden Gems compile a special report with eight of our favorite picks from the sector.

The returns from that report have been astounding, with average gains of nearly 62% to date, and every single one of the stocks outrunning the S&P 500's 21% return over the same period:

Company

Stock Return

National Oilwell Varco

116.8%

ATP Oil & Gas

72.7%

Oceaneering International

72%

Dril-Quip

54.5%

Transocean

50.6%

Bristow Group

47.6%

Tidewater

44.7%

Noble

35.6%

Average Returns

61.8%

Returns dividend adjusted from special report date of July 8, 2010. Information from Capital IQ, a division of Standard & Poor's.

Not the same panic
Unfortunately for investors, I don't think today's situation is as clear-cut as last summer's oil sell-off. That panic punished a wide swath of already successful companies, backed by decades of profitable operations. In contrast, the biggest losers in the post-Japan nuclear panic have been junior miners and other uranium stocks such as Uranium Resources (Nasdaq: URRE). Though these have bounced back from the worst of the panic pricing, they face long odds, even if other countries don't retreat from nuclear plants in the wake of the recent scare.

I expect winners in the energy space will be found not by bottom-feeding for speculative stocks that may or may not make it in the future nuclear business, but by thinking bigger, and looking toward companies that benefit from the changes in energy demand, policy, and delivery. Here are three energy themes I'm watching -- each with a stock to avoid, and one to watch.

Nuclear energy
Uranium stocks, like bell bottoms, go in and out of fashion, leaving those on the tail end of the trend wondering what they were ever thinking. There was a new craze for uranium from 2007 to 2008, as sky-high oil prices persuaded Mr. Market that nuclear would be the new new thing. Nuclear fuel-related stocks have bounced wildly since the Japanese reactor was damaged, making me wonder, along with many others, where the best investment play in the space might be.

One to avoid: I wanted to like USEC (NYSE: USU). Contrary to most nuclear-fuel stock stories, which feature grizzled miners scraping around for a big strike, USEC enriches uranium for existing plants. Unfortunately, the track record for profits here has been bad -- and I'm not the only one to think so. Moreover, the balance sheet looks lousy to me. Net debt of $3.52 per share on a sub-$5 share price, to my mind, ups the risk here significantly, especially if there's long-term political posturing on nuclear power in the U.S. I'd bet on the latter, which is why I wouldn't bet money on USEC.

One to watch : EnergySolutions (NYSE: ES) While many companies aim to capitalize on a hoped-for demand for nuclear fuel, precious few can cope with the messes that nuclear facilities leave behind. EnergySolutions is one of them. It provides cleanup services for nuclear facilities, from small labs to entire plants. This one's not for the faint of heart, since it also features a highly leveraged balance sheet. However, it's producing free cash flow, and I like the moat here better. It owns its own disposal site. And no matter which way energy policy goes in the U.S. -- whether we build more plants or mothball existing facilities  -- EnergySolutions should remain an important part of the nuclear-energy ecosystem.

Smart grid and distributed power
We hear a lot about a smart grid, where power is quickly and automatically shifted to where it's needed, and where small producers or storage devices (such as that electric car in your garage) can feed power back in. But for the most part, our grid is pretty old-school, with large plants producing the power we need, and shipping it over lines to where it's needed. There's good economic reason for that: The turbines that produce our power work best when they're huge. Thus, we need to look for companies that address that reality.

One to avoid: The bigger = better principle hasn't stopped Capstone Turbine (Nasdaq: CPST) from captivating successive generations of distributed-power dreamers, including some press post-Japan. The company may even have indulged in what looks like some recent paid pumping by a "research firm" that takes money to write about stocks. I first warned investors about this perennial money-burner way back in 2005, pointing out that Capstone was a likely loser no matter how clean or green it claimed its engine was. Capstone is simply solving a problem that doesn't exist. Economically, thousands of small turbines can't compete with a few huge ones, and as sources of backup or off-grid power, reciprocating-engine-driven generators of the kind you can get from Caterpillar have been in use for decades.

One to watch : If you're interested in capitalizing on a smarter, greener grid, take a look instead at EnerNOC (Nasdaq: ENOC). We purchased shares of this small company in Hidden Gems because it addresses the problems of grid demand in novel ways. EnerNOC enlists businesses, installing equipment and compensating them for reducing their electricity demand. EnerNOC then sells that demand reduction to the power companies, which spares them from having to add capacity or struggle to balance an overtaxed grid. EnerNOC's business model is simple in theory -- though complex in process -- but there's little doubt that it will be an important part of our future energy policy worldwide. Our electrical grid is already overstressed during hot weather, and any growth in solar or wind energy will require this kind of demand-balancing. Despite its youth, EnerNOC has become leader in this field, and a couple of recent, favorable regulatory rulings have greatly diminished its surrounding uncertainty.

Solar energy
Everyone seems to realize that the U.S. needs to curb its appetite for foreign oil, but there's no agreement at all about how to accomplish the task. As a woods-and-clean-air type, I love the idea of alternative energy sources like solar. But as an investor, I see precious few good opportunities in the space. There's a lot of money chasing returns in this industry, which tends to depress the opportunities for all players. But if you feel like you must own a solar stock, consider the following.

One to avoid: Suntech Power (NYSE: STP) was a Chinese superstar a few years back. The stock has dropped from $90 a share to $9, but believe it or not, there are even better reasons to avoid it. Its margins have continually declined, even as sales have ramped up, and the balance sheet groans under a pile of debt, giving Suntech an added anchor to pull in what is already a difficult race.

One to watch : First Solar (Nasdaq: FSLR) has also burned investors since its highs a few years back, but its 50% haircut has been a lot less extreme. Although the company has also seen margins contract since 2008, it operates at a much higher level of profitability than Suntech Power does. First Solar's gross margin is 30 percentage points higher than Suntech's, and First Solar's operating margin remains higher than 30% of revenue. That, coupled with a balance sheet featuring a nice load of net cash, gives me more confidence that First Solar is one of the best bets in the solar farm.

Foolish final thought
Not all energy crises are created equal. We might even argue that what we've got today isn't so much a crisis as a fear-inspired reevaluation of one of the most important industries in the world economy. While I don't see the same kind of forehead-slapping values today that I did in the wake of the Gulf oil spill, I do see significant opportunities in the smaller energy players highlighted above. But these are longer-term plays, and investors shouldn't expect the same kind of reversal that rewarded opportunistic buyers of depressed oil patch stocks last summer.

Even if you're not ready to take the plunge into any of these stocks, it pays to keep track of them. In fact, a good watchlist is one of the most powerful tools in investing. Use the links below to start a free, no-hassle watchlist that will deliver up-to-date news on any of the stocks discussed above.

EnerNOC and First Solar are Motley Fool Rule Breakers recommendations. The Fool owns shares of EnerNOC, and EnergySolutions. Try any of our Foolish newsletter services free for 30 days.

At the time of publication, Seth Jayson owned shares of the following: BP, Dril-Quip, Oceaneering International, and Transocean. He had no position in any other company mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.