By Nancy Zambell of InvestorPlace

It's becoming a bit of a broken record, but the refrain "another challenging month" does apply to the current market environment. There were a host of factors influencing stocks and keeping their value down in June, but I think there are three primary developments that had investors running for cover.

First, there was China and its recently downward revised leading economic index. Second, we had the uncertainty of new financial reform legislation, which made already nervous investors even more edgy. Finally, we saw lower readings in housing, employment and consumer confidence.

Many of the factors weighing down this market are sure to improve going forward. China's economy is still going strong, and we'll soon see final legislation on financial reform signed by the president. As for housing, employment and consumer confidence, well, those are more of an open question.

What isn't an open question, however, is the existence of sound investment opportunities. In fact, I know that with careful selection we can use the current volatility to make money. You see, there are plenty of fundamentally strong yet undervalued companies that the mainstream investment community hasn't picked up.

Which stocks am I referring to? The following are my current top five undervalued stock buys.

Activision Blizzard ( ATVI) is a powerhouse in the video game industry, putting out such money-making titles as Call of Duty: Modern Warfare 2, Guitar Hero and DJ Hero. Call of Duty: Modern Warfare 2 actually holds the record for video game sales, bringing in more than $1.5 billion. Activision isn't resting on its laurels, however, as the company recently announced new content for Guitar Hero and DJ Hero including some of the biggest hits from Lady Gaga, Pussycat Dolls, Rihanna, Duran Duran and Maroon 5.

The company continues to do what it does best, creating entertainment that people crave. Its latest release is the first-person action title Singularity. Although game reviewers say that it hasn't broken any new ground, it's still a fun shoot-'em-up time! And that's just what brings in the bacon for this game maker. ATVI is cash-rich and turned in some tremendous earnings all through the recession, but its stock has lagged as a result of the overall industry, as well as the global economic downturn. I think we will soon see a revival, as momentum for the sector is beginning to heat up.

Covenant Transport ( CVTI) is a young trucking company that's only been around since 1986, but already it occupies the top 10% of trucking companies, nationwide. The company began operations with just 25 trucks and 50 trailers, but by the end of 2009 the company operated 3,113 tractors and 8,005 trailers. Focused on the United States and Mexico, the company's operations include Covenant Transport and Covenant Transport Solutions of Chattanooga, Tennessee; Southern Refrigerated Transport of Texarkana, Arkansas; and Star Transportation of Nashville, Tennessee.

One of the things I really like about Covenant is the diversity of its business. The firm breaks down its revenues in two segments: 1) Asset-Based Truckload Services, which provides services for freight forwarders, less-than-truckload carriers, and traditional truckload customers, including manufacturers, retailers, and food and beverage shippers, and 2) Brokerage Services, which arranges transportation services for customers through relationships with thousands of third-party carriers. The company's five largest customers are Estes Express Lines, Georgia Pacific, Transplace, UPS ( UPS) and Walmart ( WMT). As the economy improves, I expect more demand for trucking services. I also expect freight rates to gradually increase along with increased demand. That will really bump up CVTI's bottom line -- as well as its share price.

eResearchTechnology ( ERES) specializes in providing technology and services to collect, interpret and distribute cardiac safety and clinical data to pharmaceutical, biotech, medical device makers, clinical trial sponsors and contract research organizations (CROs) around the world. ERES's solutions provide a centralized process for the collection and standardization of quality ECG data, which reduces inconsistencies that may occur from site to site, and also reduces their clients' manpower, lowering costs and improving efficiencies. The company has been in business since 1977, and has participated in more than 5,000 studies, observing around 605,000 subjects/patients in more than 85 countries, over six continents.

Overall, ERES' financials look very healthy. The company's five-year sales growth rate of 15% is twice that of its competition; and its margins far surpass its peers. Moreover, ERES has no debt. That gives the company tremendous flexibility for growing internally and by acquisition. During the first six months of 2009, the company repurchased shares to the tune of some 2.6 million. That means more earnings shared by fewer investors -- and that's a big positive for owners of ERES. Over the years the company has proven to be an earnings winner, even during the very tough recession, and now that the economy is starting to come around, look for renewed upside in the stock.

GT Solar ( SOLR) provides standard, as well as custom, manufacturing equipment and turnkey fabrication lines to the global photovoltaic (PV) industry so they can harness solar power. GT Solar also offers custom consultation, engineering services and quality control guidelines to ensure a low-cost, competitive manufacturing process. Equipment, however, accounts for the lion's share of revenues. GT Solar's equipment helps its customers produce solar grade polysilicon, manufacture multi-crystalline silicon wafers, produce solar cells and assemble complete modules -- the same types of materials whose demand will climb as the latest push from the Obama administration nudges the nation toward alternative energy sources.

As business soars for wafers, cells and panels, manufacturers will have to step up their production, requiring new and more efficient equipment. Also, this increasing demand will spur even more manufacturers to enter the market -- and they will all need GT Solar's equipment. I really like this stock here, especially in the slick wake of the BP ( BP) oil disaster. I think nearly everyone now realizes that alternative energy is the wave of the future, so why not get positioned now in this undervalued stock that serves the entire solar segment?

Green Plains Renewable Energy ( GPRE) is a one-stop shop. The company has an ethanol production capacity of approximately 480 million gallons per year. In addition, its Green Plains Trade is an independent third-party ethanol marketing business, with 360 million gallons of annual production under contract. As ethanol becomes a more popular and more eco-friendly solution than gasoline, I expect Green Plains to really take off.

Green Plains had a phenomenal first quarter. After suffering a $9.3 million loss, or 38 cents per share, in the first quarter of 2009, the company catapulted to a $15.6 million, or 58 cents per share, profit this year. Revenues almost doubled to $426.5 million, up from $221.1 million. The results were a combination of higher production volumes, more business from third-party marketing customers and cost efficiencies.

As of this writing, Nancy Zambell was recommending all of the stocks named here to subscribers of her advisory service, Buried Treasures Under $10.