This biotech stock is a bargain: Strategist

Investors have been flocking to biotech stocks this year, with the IBB, the ETF that tracks biotech stocks, up nearly 16 percent. But with high returns come high valuations, except in one name, according to a strategist who closely watches the field.

On Wednesday afternoon, Celgene was trading at 20 percent below its average analyst price target. Its share price was just over $113, compared with FactSet's average price target of $136.96.

"This is one of the largest gaps we've seen [in Celgene] over the last year," and that makes it a bargain relative to other names in the space, options expert Stacey Gilbert said on CNBC's "Trading Nation."

Read MoreBiotech investors: These are the key names to know

Gilbert notes that overall sentiment also seems to be quite bullish on the stock. Of the 26 analysts who cover Celgene, 81 percent rate it as a "buy" and less than 4 percent rate it as a "sell"—despite the fact that Celgene is trading 12 percent below its 52-week high hit in late March.

What Gilbert finds most attractive about Celgene is the recent decline of options prices. "Options prices are some of the lowest we've seen over the past two years," said Gilbert, head of derivative strategy at Susquehanna Financial Group.

So to take advantage of the bullish sentiment and cheap options, Gilbert simply bought a call option. Specifically, she looked to purchase the June 115-strike calls for $3.25. Since buying a call allows one to purchase a stock at a given price for a given time, Gilbert is betting that Celgene will rise above $118.25 by June expiration. That's a 4 percent rally in just a month.

"This is a good way to gain exposure to the stock while limiting risk," said Gilbert.

Want to be a part of the Trading Nation? If you'd like to call into our live Monday show, email your name, number, and a question to TradingNation@cnbc.com