Many punters shy away from small fields because they don't think there is much value to be had, since often there is a short priced favourite and most runners are under $10. However if you take the time to look closely at a couple of critical factors, you can definitely put the odds in your favour even in field sizes of seven or less.
Like everything else in punting it really comes down to value. Regardless of field size, if you can back a horse at $2.50 that should really be a $2 chance, you are going to make a lot of money. Other than your normal form analysis such as class, weight and fitness, a very important factor to consider is the likely leader and the likely pace of the race.
It is a fact that on-pace runners are the most profitable betting propositions and this holds true whether there are six or 16 runners. So try and identify the horse that is likely to lead in a small field when there is often little early pace. This lack of pace makes it very difficult for backmarkers to make up ground, so identifying the likely leader is essential.
This can be done by creating your own speed maps, or subscribing to one of the paid or free services that offer them. A speed map is particularly important when a slow pace is predicted as small fields and a slow pace often turn into sit-and-sprint affairs where it is very hard to make up ground from back in the field. Another important factor is having a winning jockey on board.
And by that I don't just mean a hoop with a reasonable winning strike-rate, but more importantly one whose record outperforms the market, ie. he is a break-even proposition (or even profitable) by backing all of his mounts under say 10/1. As mentioned earlier, small fields and a slow pace often result in very tactical races so I would never bet unless I'm confident in the jockey.
A potential advantage of betting in small fields is the likelihood of less interference. Australian racing is comparatively 'tight' with horses racing in very close proximity and in big fields this can cause interference to the horse you've backed. Interference is less likely though when there are only a handful of runners. And don't be put off by the 'outsiders have a great record in small fields' myth. When the $20 outsider wins in a small field, invariable the racecaller asks rhetorically 'how many times do you see it happen?'
This perpetuates the myth, but in actual fact $20 chances in small fields win the same amount of races as $20 chances in big fields, it's just that when they win as the outsider of a small field they obviously stand out more. So the next time you see a race with just a handful of starters, don't dismiss it is a good betting opportunity without doing your homework.
As well as having the form to win the race, the ideal horse to back is one that will race on the pace in a slow or even tempo pace and will be ridden by a good jockey.