Big Lots (BIG) - Get Report reports its third-quarter earnings Friday before the open of trading. It's a discount retailer that might not seem like a stalwart in this dicey retailing environment.

But as a retailer with a reliable history of out-performing expectations, it's worth paying some attention to the announcement. Estimates call for the company to post a loss of one cent a share.

It's also worth noting the way the stock has a specific pattern of trading on earnings announcements, and identifying that pattern might afford the best investment opportunity.

Big Lots has recorded 10 straight quarters of same store sales growth. The last eight quarters its earnings beat expectations. And often by a factor of 15% or more.

Though, here comes the "but." The stock has an unfortunate history of trading sharply lower on the heels of even its glossiest earnings.

Look at how the stock performed following the release of second-quarter results on Aug. 26, which easily trumped expectations. The stock had been trading at $56 a share in mid-August. By late October, it had fallen to $43. And this - again - is in response to good news. But anybody who courageously identified that October bottom as a buying opportunity would have booked a tidy 23% return in little more than a month, with the stock now trading at $50. 

Obviously nobody can predict a repetition of the cycle following the third quarter announcement. Though, in fact, if enough investors have identified this pattern, the gains of the last month mean this has become a classic crowded trade. Short interest in the stock has climbed to 28% of the float. (Which, in and of itself, hints at the possibility of a short squeeze that would drive the stock higher, at least temporarily.)

Fundamentally, management has a habit of conservative guidance, trying to execute the "under promise then over deliver" initiative. But it also makes the predictive nature of earnings expectations a trickier enterprise.

But this is a retailer that has a characteristic that virtually all contemporary retailers wish they could lay claim to: it's got virtually no online exposure. Big Lots makes 23% of its revenues from furniture sales, and another 22% from soft home goods. How many people buy a sofa over the Internet? Sure, consumers might go shopping at a brick and mortar department store to identify the living room set of their dreams, then go online to see if they could get the same davenport for a better price. But the Big Lots model is different: since it's selling stuff its vendors couldn't squeeze into the regular retail supply chain, it's product offerings tend to be more idiosyncratic. Implicit is the sense that if you don't buy the credenza that caught your eye on the last trip it might not be in stock on your next trip.

Big Lots, based in Columbus, Ohio, has also been making a good chunk of change on its furniture financing initiative. While lots of furniture retailers make the "no money down and no payments for 36 months" promise - it's pretty much the script of every commercial for Raymour and Flanagan - it's still a good business, and one that's just now gaining traction at Big Lots.

Also, as a brick and mortar operation, Big Lots has been identified as a good play on holiday sales. Foursquare, a location intelligence app that tracks foot traffic into retail stores by counting which stores mobile devices are entering, called Big Lots the biggest winner of the foot traffic war on Black Friday.